Oral Answers to Questions

DUCHY OF LANCASTER

The Chancellor of the Duchy of Lancaster was asked—

Internet Job Advertising

John Spellar: What advice her Department is issuing across Government on the greater use of the internet for advertising job opportunities in Government and Government activities.

Patrick McFadden: It is important that we make optimum use of the internet in job advertising and other areas to maximise value for money for the taxpayer while at the same time ensuring access to information about job opportunities in Government for the one third of the population who do not use the internet. All Departments are instructed to advertise vacancies on the civil service jobs website, at http://www.careers.civil-service.gov.uk/ and also, where appropriate, on the Jobcentre Plus website. We recognise that civil service spending in this area is a small part of total public sector spending, but we are committed to making better use of the internet and reducing expenditure on press advertising. To that end, we expect to reduce the £1.3 million estimated spending on senior jobs in the six largest spending Departments by up to 80 per cent. over the next few months.

John Spellar: I am pleased by the Minister's recognition of the dramatic increase in the use of the internet. Can he get a sense of urgency into Departments so that they use the internet to a much greater extent, not only for job advertising but also for public notices about Government activity? Will he spread that practice to other publicly funded bodies, not least local government?

Patrick McFadden: I agree with my right hon. Friend that more could be done both nationally and locally, and my right hon. Friend the Chancellor of the Duchy of Lancaster and I will shortly be meeting the First Civil Service Commissioner and the Commissioner for Public Appointments to see what more can be done. Some moves are already being made to have more generic press advertising, with signposting to appropriate websites. Some aspects of local notices are governed by legislation, but our priority throughout will be to maximise value for money for the taxpayer, to make the best use of the technology available and ensure proper access for everyone to information about Government jobs.

Greg Hands: Literally thousands of job ads pour out by e-mail from the Government Communication Network, many of which are readvertisements for what seem to be challenging roles that are sometimes difficult to fill, such as the head of external communications at the Rural Payments Agency, who has the seemingly difficult role of
	"improving customer communication and stakeholder engagement".
	I also saw a vacancy for "communisation" at the Identity and Passport Service. I have to—

Mr. Speaker: Order. I call the Minister.

Patrick McFadden: I think the hon. Gentleman was trying to make a point about the type of job available. Our concern in this question is to ensure that whatever type of job is advertised we make proper use of the technology and that we also cater for those who do not have access to the internet. By combining both things we can improve value for money and still do the right job in advertising Government posts.

Gordon Prentice: Next week, Sir Alistair Graham stands down as chairman of the Committee on Standards in Public Life. Have we advertised for a replacement yet and if not, why not?

Brian H Donohoe: Do you want a job?

Patrick McFadden: I shall endeavour to find out for my hon. Friend the Member for Pendle (Mr. Prentice) exactly what the position is with regard to that job. If he is interested, I am sure he will be a strong candidate.

Charities (Income Tax Cut)

Sandra Gidley: What discussions she has had with the Chancellor of the Exchequer on the impact on charities of the 2 per cent. cut in the basic rate of income tax from April 2008.

Edward Miliband: My right hon. Friend the Chancellor and I have discussed the impact of the cut in the basic rate of income tax on gift aid and the need to build on the progress made since 1997, which has led to an increase in the resources going to charities through gift aid from £134 million to £750 million. The Charities Aid Foundation estimates that £700 million is potentially available from more tax-effective giving and we aim to come forward with measures at the time of the pre-Budget report, before the introduction of the basic rate tax cut next year.

Sandra Gidley: Bearing in mind the fact that charities will probably lose a total of £70 million, can the Minister clarify what some of the strategies will be either for increasing the take-up of gift aid or reforming the system altogether so that it is simpler for people to use?

Edward Miliband: I agree that we need to do all we can to drive up tax-effective giving. Just in the last year for which figures are available, there was an increase of £125 million in the receipts to charities under gift aid. We want to take action on a number of fronts: first, by building on the improvements that have already been made in gift aid; secondly, by seeing how we can promote payroll giving, which is a very tax-effective form of giving; and, thirdly, by ensuring that there is greater awareness of how to give effectively—the Charities Aid Foundation has identified £700 million that could be available to charities and we want to do all we can to make that money available.

Anne Snelgrove: Last week I was pleased to organise for Oxfam a breakfast meeting in my constituency with leading Swindon companies such as Nationwide, Zurich, npower and Barclays, all of which have worked hard on payroll giving. Does the Minister agree that payroll giving will increase giving to charities, and would he encourage MPs to join in?

Edward Miliband: I agree with my hon. Friend. I have recently taken advantage of being able to give through the payroll giving scheme and I have written to all Members of the House to encourage them and their employees to do so too. It is still the case that too few employees take advantage of payroll giving. We want to do all that we can to promote the scheme. As I say, I encourage Members of the House both to take up the scheme themselves and to promote it in their constituencies.

Danny Alexander: Charities in Scotland will lose around £7 million as a result of the change and will also be badly affected as the Minister's colleagues divert lottery funding away from good causes in Scotland and towards filling the Olympics deficit. What comfort can he give to charities such as Crossroads in my constituency, which are being hit hard by the changes at a UK level and also by unacceptable cuts at local authority level, so that they can continue to do their good work in supporting older people in the highlands and across Scotland?

Edward Miliband: The hon. Gentleman should join us in working on the different ways in which we can promote more tax-effective giving. We want to see improvements in gift aid. If he or the charity that he mentions have any suggestions, we would be interested to hear them. We want to find ways of promoting payroll giving and of raising awareness of how to give effectively. This is one of the occasions when there are greater resources available under gift aid if people give more effectively and charities encourage them to do so.

Sarah McCarthy-Fry: I agree with the Minister that payroll giving is effective. Has he had any discussions with the professional accounting bodies or the professional human resources bodies to ensure that, particularly in small and medium-sized enterprises and other small organisations, the staff who organise the payroll are aware of the process and the HR staff are making employees aware of the scheme?

Edward Miliband: My hon. Friend raises an important point. It is particularly hard for people working in small and medium-sized enterprises to take advantage of payroll giving. In the past, we have made resources available to encourage payroll giving by small and medium-sized enterprises, but I will take up her suggestion and ensure that we have discussions with the bodies that she mentions.

Greg Clark: No one doubts the Minister's good intentions, but he will be judged on his record. Since his role was created, the Government have taken £100 million from charities to prop up the Olympics. They have reneged on their promise on full-cost recovery and now they are taking £70 million a year from gift aid. That is a pretty disappointing record. Was he consulted by the Chancellor in advance of the Budget, and did he object, or does meekness before the Chancellor run in the family?

Edward Miliband: I did talk to the Chancellor about the issue. I thought that the Conservative party used to be in favour of cutting the basic rate of income tax, but clearly it is not any more. We on this side of the House are in favour of cutting the basic rate of income tax to 20p. I would have thought that the hon. Gentleman would come to the Dispatch Box to congratulate us on our record on gift aid, because the amount of money going to charities has gone up from £124 million to £750 million. It is not just we on this side of the House who think that we have a good record on gift aid; the Leader of the Opposition has said that
	"there have been some positive developments."

Third Sector Funding

Andrew Gwynne: What estimate she has made of Government funding allocated to the third sector between 1997 and 2001; and if she will make a statement.

Edward Miliband: Between 1997 and 2001, total public funding to the charitable sector increased from £5.5 billion to £7.5 billion, and it increased to over £10 billion in 2003-04, the latest year for which figures are available. For central Government, there has been a 96 per cent. real terms increase in funding since 1997.

Andrew Gwynne: I welcome that response. Does my hon. Friend agree that the £80 million announced in this year's Budget for small grants to community organisations is of particular importance to groups such as the Tame Valley Green committee in Dukinfield and the Friends of Reddish Baths, who will be able to continue to fight for improvements to their facilities locally, giving them a sense of ownership once those improvements are achieved?

Edward Miliband: I agree with my hon. Friend. In the consultations that we have been doing with small voluntary sector organisations around the country, one of the biggest things that has come through is the need to have small amounts of money, which the smallest community groups can access to allow them to undertake one-off events and create a series of activities in constituencies around the country. I am extremely pleased that the Chancellor was able to announce an £80 million fund in the Budget and I hope that the organisations that my hon. Friend mentioned will be able to take advantage of that.

Philip Davies: A number of years ago, the Treasury set up the Goodison review to try to encourage more funding to be given to good causes. There were a number of excellent recommendations, but none of them has been implemented. Can the Minister tell us when some of the Goodison review recommendations will be implemented?

Edward Miliband: I vaguely recall the Goodison review and will endeavour to investigate the matter further and write to the hon. Gentleman about it.

Ann Coffey: For small community organisations in my constituency, access to grants for capital projects and other activities is very important. However, they are often put off by the complexity of applying for grants. Will my hon. Friend assure me that for the new funding that he has announced, the application process will be as straightforward as possible? May I invite him to visit my constituency to see the very good work being done by community organisations?

Edward Miliband: I certainly accept my hon. Friend's offer to visit her constituency. She is completely right that the micro-grants scheme needs to be made to work as simply as possible. We are talking about small amounts of money that organisations will apply for, so there should be as little bureaucracy as possible, as too much bureaucracy puts off small organisations that rely on volunteers for their work. We will endeavour to achieve that.

DEPUTY PRIME MINISTER

The Deputy Prime Minister was asked—

Ministerial Visits

Kali Mountford: What visits he has undertaken while deputising for the Prime Minister on international issues; and if he will make a statement.

John Prescott: In addition to those visits I announced to the House on 7 March on behalf of the Prime Minister, I recently visited the Czech Republic and Malta to discuss with their leaderships the issue of climate change and other European matters. I held a number of bilateral meetings with the Prime Ministers and deputy Prime Ministers of both countries, and with the President of Malta. I addressed and debated the issue with an audience of politicians, some of them Cabinet members, academics and senior industry figures. I also gave a speech at the British Council's youth forum seminar on climate change.

Kali Mountford: I am very pleased to hear my right hon. Friend tell the House that he has visited Czechoslovakia— [Interruption.] I apologise to the House, I mean the Czech Republic—and Slovakia. I hope that my right hon. Friend, as well as debating the vitally important issue of climate change, also took the opportunity to discuss any innovative opportunities presented to our country—and particularly to John Lightfoot in my constituency, an innovative producer of air-sourced heat pumps that reduce CO2 emissions. Will my right hon. Friend use his good offices to support innovators such as those in Yorkshire who— [Interruption.]

Mr. Speaker: Order.

John Prescott: The House will be aware that the Prime Minister of the Czech Republic is very sceptical about the science of climate change, but I must say that many of his Ministers—and, indeed, the deputy Prime Minister—are members of the Green party, clearly showing that the debate on climate change is well under way in the Czech Republic. My hon. Friend will know from my work as the China taskforce chairman that I am delivering a report in Beijing next week on the work being done on climate change. I will also be in Shanghai tomorrow to deliver a speech on those matters and I should like to apologise to the House for having to leave here immediately after my parliamentary time. I will, of course, be happy to mention the excellent work of Yorkshire Forward in promoting the industries of our great county.

Vincent Cable: I read the Deputy Prime Minister's speech on climate change—it was a very good speech—but how can he expect it to be taken seriously when the Government are cutting back on climate research at the Hadley centre and when carbon emissions in the UK have risen over the last 10 years while the share of environmental taxes in the economy has fallen?  [Interruption.]

John Prescott: As has just been said from a sedentary position, as usual, this is another opportunity for the Liberals to do nothing about these matters except complain. The Government have fully supported the Hadley centre and everyone recognises the professional contribution that it has made to the debate on climate change. The hon. Gentleman should also bear in mind that during the 10 years of the Labour Government, there has been a 28 per cent. growth in our economy, an 8 per cent. cut in greenhouse gases with only a 1 per cent. increase in carbon. That is why my right hon. Friend the Secretary of State for the Environment, Food and Rural Affairs has made several proposals to be put before the House in a climate change Bill to deal with emissions. We are proud to put forward our record of achieving twice the target set for us at Kyoto.

European Policy

Mark Pritchard: What recent steps he has taken to co-ordinate Government policy on European matters; and if he will make a statement.

John Prescott: I regularly discuss policy relating to Europe with ministerial colleagues. For example, earlier this year and shortly after their accession to the EU, I visited Romania and Bulgaria on behalf of the Prime Minister. I met the Presidents and Prime Ministers of both countries to discuss issues of bilateral and regional importance

Mark Pritchard: Does the Deputy Prime Minister agree with recent comments of Mr. Barroso, the President of the European Commission, who suggested that Europe should have a common migration policy? If he does, does he think that that will help or hinder good community relations in this country?

John Prescott: I have not read the comments of Mr. Barroso. [Hon. Members: "Oh!"] Oh, shock, horror—no, I have not. But all these matters are important. I have common consultations in Europe and nationally. They were involved in some of my discussions abroad. It is an important issue, and we will work to find common agreement and consensus, to the benefit of all.

Si�n Simon: Has the Deputy Prime Minister consulted colleagues on whether a policy of little Englander isolationism and alliance with nobody but crackpots, fanatics and the Czechs might be the best thing for the United Kingdom?

John Prescott: My hon. Friend can say that, but I certainly cannot comment on it.

William Hague: Is it not time that the Prime Minister brought some coherence to the Government's European policy? Four years ago, the Prime Minister said that we needed a proper constitution for Europe; but on Monday, he said that we did not need a constitution but that we had to have a new treaty, which contradicted the Foreign Secretary, who said that the EU was coping just fine as it was, who was in turn contradicted by the Minister for Europe, who said that the current rules are unsustainable. Is it not time that the Deputy Prime Minister stepped in to sort out the chaos, and will he reiterate the pledge that there will be no bringing in of parts of the constitution through the backdoor?

John Prescott: The Prime Minister made it clear at his joint conference with the Dutch Prime Minister on Monday that his concern was obviously to secure some agreement on those matters in the European Council of Ministers when it meets in June and to make it clear that we are concerned about the administrative changes and that we would be supportive of them, but not of the constitutional changes.

William Hague: As a member of the Government who held a referendum in the north-east, with a result that will never be forgotten in the north-east or the rest of the country, will the Deputy Prime Minister, in his final weeks in office, leave a legacy to democracy and join us in declaring that any new treaty that transfers powers from Britain to the European Union should be subject to a referendum of the British people?

John Prescott: The Prime Minister has always made it clear in regard to constitutional change that we have promised that we would hold a referendum. That is a matter of the judgment to be exercised at the next summit meeting, and that is the important decision. It has been confirmed by the Prime Minister, and no doubt, the House will have a chance to debate those issues once the summit comes to its conclusion in June.

Departmental Expenditure

David Amess: What plans he has to reduce his departmental expenditure in line with Whitehall efficiency savings targets.

John Prescott: This Government are committed to improving the delivery of public services and ensuring maximum value for money for the taxpayer. The 2004 spending review set a target for achieving annual efficiency gains of 21 billion by 2007-08. Against that ambition, Departments and local authorities already reported annual efficiency gains worth over 15 billion by the end of 2006. That will, in fact, lead to 26 billion a year for front-line services by 2010-11. My Department is, of course, subject to the same efficiency targets as other Departments.

David Amess: With inflation, interest rates, debt and unemployment all on the rise, that is exactly what the right hon. Gentleman is doing with the British taxpayer's money. Will he explain to the House how his Department's budget was increased by a third in March, already having been increased last November, in spite of the fact that he has lost most of ministerial responsibilities?

John Prescott: The hon. Gentleman uses propaganda by saying that unemployment is increasing in this country. There are now over 2 million more people in work, which is something that we are quite proud of. He talks about an increase in my Department's expenditure, but that was an auditor's requirement, not extra departmental expenditure, as I explained to the House last time I answered questions. The hon. Gentleman seems to be concerned about Government efficiency, but he was proud to advocate the poll tax, which was neither fair to ordinary people, nor efficient for the Government. If he was so proud of the poll tax and the Tory Government, he should have fought the 1997 election on that Government's record in Basildon, instead of doing a chicken run down to Southend to save his skin.

Modern Slavery

Laura Moffatt: What steps the Government are taking to develop international initiatives to abolish modern forms of slavery.

John Prescott: I would like to begin by recording my thanks to you, Mr. Speaker, for allowing the House to hold a very successful full-day Adjournment debate on Tuesday 20 March to mark the bicentenary of the abolition of the slave trade Act. As was agreed by all participants in the Adjournment debate, slavery is still with us in its modern forms. On 23 March, the Government were proud to sign the Council of Europe convention on action against trafficking in human beings to tackle this appalling modern-day form of slavery. The Home Secretary has published an action plan on what the UK will be doing. We will be working towards ratification and we are co-operating closely with our international partners to take forward this work. I recently visited Geneva, where I held discussions with a number of UN and other international organisations on how we may do more.

Laura Moffatt: Does my right hon. Friend agree that alongside the important debates on the bicentenary of the abolition of the slave trade, the best way in which the House could mark that would be to eliminate modern-day slavery? Will he give the House details of his talks with the United Nations and, especially, countries to which modern-day slaves are exported, on ensuring that we eliminate this filthy trade?

John Prescott: I agree greatly with what my hon. Friend says. It was the unanimous opinion of hon. Members on both sides of the House that more should be done about modern-day slavery. Indeed, as I mentioned, I have held discussions with UN bodies about the matter. Hopefully, we will be able to do more. The ratification of the Council of Europe convention will be an important step forward. I welcome the fact that Kofi Annan will address the House on 8 May. From the discussions that I have had with him, I know that he has always felt that the UN could be more effective in deploying the policy. I hope that he will be able to say something about the matter when he addresses the House [ Interruption. ]

Mr. Speaker: Order. May I ask the House to come to order? It is being unfair to hon. Members.

John Bercow: Does the right hon. Gentleman accept that one often-neglected modern form of slavery is the use of child soldiers? Given that the Government of Burma, a brutal military dictatorship, use such soldiers on a scale that is proportionately greater than in any other country of the world, will the Deputy Prime Minister consider launching an international initiative to bring that appalling practice to an end?

John Prescott: I very much agree with every word that the hon. Gentleman says about that. When I have addressed meetings of the Association of South East Asian Nations on behalf of the Prime Minister, we have discussed Burma's membership and the terrible circumstances of child soldiers. We are doing everything that we can to do end that deplorable practice.

Claire Curtis-Thomas: I was delighted to meet my right hon. Friend in Sierra Leone recently. He will be aware that British companies intend to develop there world-class library and literacy facilities to the environmental standards that he introduced in this country. Will he do all that he can to ensure that we support such initiatives?

John Prescott: Again, I congratulate my hon. Friend on the work that she has done in regard to Sierra Leone, especially on effectively getting community facilities and buildings established there. I was pleased to meet her and several officials recently to encourage her to take part in the development of Equiano centres. The project gives various cities and towns in Sierra Leone that enjoy the same name as some of the towns in this country the opportunity to develop Equiano community centres. Using the name Equianoperhaps more so than Wilberforcegives us the chance to recall the contribution made by black people to getting rid of the horror of the slave traffic.

Ministerial Meetings

Anne Main: What meetings he has had with just the Prime Minister and Chancellor of the Exchequer in his ministerial role in the last 12 months.

John Prescott: I have held regular meetings with the Prime Minister, the Chancellor and other Cabinet colleagues on a wide range of issues. Sadly, even the Prime Minister, the Chancellor and I do not have enough time to discuss all the achievements of this Labour Government, although we do discuss the programme of future Labour Governments.

Anne Main: I thank the Deputy Prime Minister for that reply, but does he share my concern and that of the British taxpayer that this is turning out to be a rather expensive dating agency between himself, the Chancellor and the Prime Minister?

John Prescott: Discussions between the Prime Minister, the Chancellor, myself and other Cabinet members are one of the responsibilities I have in my job, and I am delighted to play some part in producing a very successful record for the 10 years of this Government.

PRIME MINISTER

The Prime Minister was asked

Engagements

Angela Watkinson: If he will list his official engagements for Wednesday 18th April.

Tony Blair: Before listing my engagements, I know that the whole House will again wish to join me in sending our profound condolences to the families and friends of those of our service personnel who were killed in action in Iraq and Afghanistan during the Easter recess. They were: Kingsman Danny Wilson of the 2nd Battalion, the Duke of Lancaster's Regiment; Rifleman Aaron Lincoln of the 2nd Battalion, The Rifles; Second Lieutenant Joanna Yorke Dyer of the Intelligence Corps; Corporal Kris O'Neill and Private Eleanor Dlugosz, both of the Royal Army Medical Corps; Kingsman Adam Smith of the 2nd Battalion, the Duke of Lancaster's Regiment; and Private Chris Gray of the 1st Battalion, Royal Anglican Regiment.
	In addition, I know that the House will wish to send our condolences to the families and friends of Colour Sergeant Mark Powell of the Parachute Regiment and Sergeant Mark McLaren of the Royal Air Force, who were killed in the incident involving a collision between two Puma helicopters in Iraq at the weekend.
	All those service personnel and, indeed, those still serving have shown heroism, dedication and the most professional commitment to their country. Britain owes them a deep debt of gratitude.
	This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

Angela Watkinson: The Prime Minister's 10-year drug strategy is coming up for renewal and the independent UK Drug Policy Commission has reported that it is not working. One third of crime, much of it acquisitive and drugs related, is committed by 13 to 19-year-olds, who believe that cannabis is not only legal, but harmless. Will the Prime Minister now reverse his disastrous decision to downgrade cannabis and restore it as a class B drug?

Tony Blair: I have to correct the hon. Lady. In fact, the UK Drug Policy Commission has not found that there has been no progress in drug policy; on the contrary, the commission believes that there has been progress, but there remains much more to do. According to the most recent British crime survey, drug misuse is down some 16 per cent. since 1998, drug use among young adults is down 21 per cent., and class A drug use remains relatively stable for the first time in a long time, as the commission points out. In addition, we have doubled the amount of money for the treatment of people on drugs. I appreciate that we have a very great deal more to do, but it is simply not the case that we are not making the investment or the changes that are necessary. As for tougher sentences for those who peddle drugs, many of those were contained in the Criminal Justice Act 2003, which the hon. Lady voted against.

Joan Humble: The Prime Minister will be well aware of the strength of feeling in Blackpool about the casino advisory panel's recommendation. Will he take into account the opinions strongly expressed both in this House and in the other place that the new super-casino should be located in an area where the social impact will be minimised and the regeneration potential maximised?

Tony Blair: I know that my hon. Friend has campaigned very hard indeed on this issue. I am entirely sympathetic to the concerns that Blackpool has expressed. It is a pity that we ended up with Manchester being the site for the super-casino although I think that it is perfectly justified thereand Blackpool unable to make the regeneration plans that it wants to make. As we have said, we shall consult carefully and come back with proposals after 3 May, which we have to do because of purdah. As a House, we need to look carefully and sensibly at the issue and recognise that in a world of online betting and huge opportunities for people to bet, casinosespecially when they bring regeneration with themare not something that is against the proper norms of society, but something that can, in places such as Blackpool and Manchester, bring in much needed private investment and regeneration that will help to provide jobs and high living standards for people.

David Cameron: I join the Prime Minister in paying tribute to the nine servicemen and women killed in Iraq and Afghanistan since we last had Prime Minister's questions. They died serving their country, and that is a reminder of what we owe them and their families for the service that they gave.
	There are 125,000 people who have paid into company pension schemes who have seen them collapse, and who have been left with little or nothing

Ken Purchase: Get the money back off those who stole itthe gaffers.

David Cameron: I hope that hon. Members who are going to retire on fat pensions will actually listen, because many of the people concerned are getting nothing. We are all dealing with such constituency cases, and some of them are heartbreaking. The Budget changes were welcome, but they did not help those who have already retired, and they did not speed up the payments. Today, we can help those people, and I ask the Prime Minister in a genuinely cross-party way [Interruption.] Yes. We have tabled amendments to the Pensions Bill, and they are signed by MPs from across the House, including his own former Pensions Minister. Will the Prime Minister look urgently and positively at those constructive proposals?

Tony Blair: Let me just correct the right hon. Gentleman on one point: we most certainly have been listening to people on this subject. After all, there was no financial assistance schemeabsolutely nonein place for all the years of the last Conservative Government, when, as a result of pension mis-selling, people were in real difficulties as regards their pensions; so with respect we most certainly are listening to the plight of people. In addition, of course, we have put some 12 billion a year extra into support for pensioners.
	It is however precisely because we have listened that, in the Budget, the Chancellor upped the scheme to, I think, 8 billion; that is what it is going to cost over the years to come. It lifts it up to 80 per cent. support, and 125,000 people will benefit. The problem with going still further is that we do not know that we can afford to make that commitment to people. For precisely that reason, and because people have raised the issue of whether there are unclaimed assets that could be used, my right hon. Friend the Secretary of State for Work and Pensions has announced a review of that. We will look at it carefully and we will see whether it is possible to do more, but we do not believe that it is responsible to make a commitment now to pensioners to pay them even more when we have not got the ability at the moment to up that figure from 8 billion.

David Cameron: I am grateful for the Prime Minister's answer. The problem with the Budget changes is that they do not help people who have already reached retirement age. Many Members will have cases, as I do, of people who have reached retirement age, some of whom are dying, and who are not going to get their money; some of them are having to go on working. That is the problem that we have to address. Does the Prime Minister understand that so far only about 1,000 people have actually been helped? The financial assistance scheme is not working. Will he not look at a Treasury loan? That is how we dealt with the mess that was left by the Maxwell scheme. Surely he agrees that only 1,000 people helped so far is not good enough? As I say, some of the people are in great hardship. Surely we should act now, so that at least they can get some of the pension for which they worked and saved so hard.

Tony Blair: It is, of course, precisely because we want to do what we can to help people responsibly that we have introduced these new proposals, the Pension Protection Fund and a host of other measures designed to support people, but I am afraid that the position, very simply, is this: we cannot make that additional commitment unless we are sure that the finances are there to fund it; otherwise we will be saying to people, Yes, we can give you this additional payment, when we cannot be sure until the review is published that we are able to make that commitment. As for taking out some unspecified loan from the Treasury, we do not believe that that is a proper way to deal with the issue, because it leaves us with a financial liability that we cannot be sure we can meet. The issue between us is not who wants to help people more, because, as I say, we have already introduced the first ever system of help for people in those circumstances. However, we need to be sure that we can actually fulfil a commitment that we make to people, since it would be the cruellest thing to tell them that we can make that commitment and can bail them out, if it may actually transpire that we cannot.

David Cameron: The Prime Minister says that the amount is unspecified, but it is not. We know that the first-year cost is 30 million, which would help the people who have hit retirement age with nothing, as only 1,000 of them are being helped. May I ask the Prime Minister something specific? We welcome the fact that there is review, but can it be a cross-party review, because we have a great contribution to make, and when does he expect it to report? The Prime Minister's former pension adviser, Ros Altmann, said:
	Suddenly we are on the verge of a breakthrough, which could give these people the pension they've earned. All it needs is for enough Labour MPs to have the courage to back it.
	He listened to her advice in the past. Why will he not listen again now?

Tony Blair: I understand that the review will report in the summer. No, we cannot make it a cross-party review as such, but we are perfectly happy to listen any ideas put forward by Opposition parties or, indeed, by anyone else. If I can come back to the nub of the issue, when the right hon. Gentleman says that it is only a 30 million cost in the first year, that is correct, but it then builds up over time, so our worry is that we would end up with an unfunded commitment that runs into hundreds of millions of pounds. If we accepted the amendments today, I think that I am right in saying the full cost would be 2.48 billion. We simply cannot responsibly make such a commitment until we know whether we can fund it. That, with the greatest respect, is the difference between being in opposition and being in government.

Alasdair McDonnell: Is the Prime Minister aware of the major disruption that will occur in NHS hospitals in Northern Ireland and in parts of Britain, too, on 1 August next, following the introduction of the hospital doctor training programme known as modernising medical careers? Will he advise the Secretary of State for Health to postpone the programme for a year until the administrative problems are sorted out?

Tony Blair: Yes, we are aware of those problems, which is precisely why the review was announced, as we want to make sure that this happens in a better way for next year. I understand entirely both the complexities of the system that has been introduced and the need to make sure that it accords properly with the needs of the health care system in Northern Ireland and elsewhere. I would point out, however, that as a result of the measures that we have taken in Northern Ireland and elsewhere in the United Kingdom, there has been a huge increase in the number of junior doctors, a 70 per cent. increase, I think, in the number of training places and, of course, pay has gone up in real terms by 30 per cent.

Menzies Campbell: I join the Prime Minister in his expressions of sympathy and condolence. This is a bleak and sombre day. He will be aware that nurses' leaders are threatening strike action in relation to the Chancellor's pay offer. Can he explain why nurses in England and Wales are not getting their full increase up front?

Tony Blair: For the reasons that the Chancellor gave. To make sure that we deal with the overall issue of pay in the economy, it is important that we stage the awards. However, on average, as I understand it, there will be an over 4 per cent. increase for nurses. May I point out to the right hon. and learned Gentleman that when we came to office, pay was just over 12,000 for nurses starting out in their profession? It is now almost 20,000, so there has been a huge real-terms increase in nurses' pay over the past 10 years. Incidentally, there has been an 85,000 increase in the number of nurses, too. I entirely understand why staging an award is never popular, but in this instance it is necessary.

Menzies Campbell: It is not just pay that is at issue in the national health service. Newly qualified nurses cannot get jobs; nursing assistants will be hit by the Chancellor's abolition of the 10p tax rate; and junior doctors are up in arms. Is it any wonder that the Government have lost the confidence of health care workers and of their patients?

Tony Blair: If we look back over the past 10 years, we can see that the publication, for example, in the past few weeks of the annual winter report on the NHS was instructive. The right hon. and learned Gentleman will know that in the last years of the Conservative Governmenteven, indeed, in the first years of this Governmentevery single winter there was a winter crisis. There has not been one for several years, because of the extra investment and the extra capacity. [Hon. Members: Warmer winters?] No. If we look at waiting times, investment in the national health service, the treatment of cancer and cardiac disease, and accident and emergency departments, the truth is that the patient is getting a better deal in the national health service today, precisely because of the investment and reform that we have put in.

Lee Scott: Will the Prime Minister please join me in sending condolences to the family of Eden Galvani-Skeete, a beautiful six-year-old girl who burned to death in Turkey last summer, and assist the family in getting justice from the Turkish authorities and ensuring that those responsible are brought to trial?

Tony Blair: I am sure that the whole House will want to join the hon. Gentleman in sending our condolences to Eden's family. I understand that the deputy head of mission and British vice-consul at our embassy called the Minister at the Turkish Ministry of Tourism on 8 February to raise our concern about the general safety of British nationals in such unsupervised shows. The Turkish authorities have started legal proceedings against some members of staff at the hotel complex. The next hearing is scheduled for 8 May. Consular staff in London have remained in contact with the Galvani-Skeete family and are keeping them updated with any news from the court case in Turkey. We will continue to do that up to and all the way through the proceedings.

North-West Leicestershire

David Taylor: When he next plans to visit North-West Leicestershire on official business.

Tony Blair: I have no current plans to do so.

David Taylor: Last Sunday, on the BBC politics programme, the Prime Minister gave an excellent summary of the myriad benefits delivered by our Government's domestic policies since 1997, but I was alarmed by his assertion that all English secondary schools should soon become academies or trust schools. If he comes to North-West Leicestershire before late June, will he meet the governors of Ibstock community college to tell us why an excellent, accessible, genuinely comprehensive school should pursue this policy path and risk distancing ourselves from the local community or being taken over for a knock-down price by the richest local bidder?

Tony Blair: I thank my hon. Friend for his kind words about our record on education. It is true, for example, that when we came to power there were only just over 80 secondary schools in the whole country with 70 per cent. of pupils getting five good GCSEs; the figure is now more than 600. The reason why I believe that in future most secondary schools, or all secondary schools, will become trust or academy schoolsit is a choice, of courseis that they benefit from these partnerships. In doing so, academy and trust schools remain with a fully comprehensive intake. Indeed, academy schools have a higher percentage of pupils taking free school meals than the average secondary school. We have increased results dramatically since 1997 partly because of the ability to have partnerships with outside bodies. Specialist schools were the first step in that. At the time, people said that they would spell the end of the comprehensive system; they did not. Of course, my hon. Friend has four excellent specialist schools in his own constituency.

David Cameron: When it comes to who should be the next Prime Minister, the Environment Secretary has now ruled himself out, so will the Prime Minister now explicitly endorse the Chancellor?

Tony Blair: I am afraid that once again I have to disappoint the right hon. Gentleman and others, because I will make my statement at the time I decide to stand down. However, I would say that after yesterday's debate, and the absolute and comprehensive drubbing that the Chancellor gave the Tory Front Bench, he should be rather more worried about the leadership potential on his side of the House.

David Cameron: If the Prime Minister thinks the Chancellor did such a good job, why did not he turn up and vote for him? Was he too busy? I am not asking the Prime Minister to say anything new. Before the coup last year, he said:
	I'm absolutely happy that Gordon will be my successor.
	Why cannot he repeat those words now?

Tony Blair: For the very reasons that I have just given. What the right hon. Gentleman, and the Conservative party, will have learned from yesterday's debate is that when it comes to serious policy on the economy, on health, on education and on law and order, we have the serious answers to the serious questions, and he is not at the races.

David Cameron: The interesting thing is that the Prime Minister will not endorse the Chancellor. We know why we do not want the Chancellorhe has complicated the tax system and virtually bankrupted the pensions system, he is impossible to work with and he never says sorry. That is why we do not want himwhat does the Prime Minister think is wrong with him?

Tony Blair: Let me tell the right hon. Gentleman what is right with the Chancellor. The right hon. Gentleman has some experience of the economy, has he not? He had something to do with the British economy once, back in 1992, did he not? He was the special adviser to the Chancellor of the timewe remember Black Wednesday.
	The Chancellor has delivered the strongest economic growth that this country has ever seen, interest rates that are half what they were under the previous Conservative Government, the highest employment, the lowest unemployment for years and rising living standards. What has the right hon. Gentleman delivered for the British economy? A bit part on Black Wednesday.

Hon. Members: More!

Mr. Speaker: Order.

Gordon Banks: The council tax in Scotland raises just over 2 billion. Increasing income tax by 3p in the pound would raise 1 billion. That would leave a shortfall of more than 1 billion. Does my right hon. Friend agree that introducing such a scheme would lead to massive cuts in public services or tax hikes in unforeseen areas?

Tony Blair: The policy, which we will not adopt, of replacing the council tax in Scotland with a rise of 3p in the pound in the basic rate of income tax means thatapart from the shortfall in the money, which would leave public services short of several hundred million poundsa two-earner couple in a household, or, even worse, a three-earner household, would be hit heavily by a local income tax. That is why it is such a bad idea and why I believe that people will reject that policy on 3 May.

Engagements

Norman Baker: Under this Government, millions of innocent people have been added to the DNA database, which is the largest in the world. People are locked up without trial for 28 daysthe Prime Minister wanted 90 days. Free speech outside Parliament has been banned, children are routinely fingerprinted in schools and there are plans to curb trial by jury and force ID cards on us. Yet, last year, the Prime Minister said:
	I don't want to live in a police state or a Big Brother society or put any of our essential freedoms in jeopardy.
	Is it not time the Prime Minister showed some consistency between what he says and what he does?

Tony Blair: I gather from that rant that the hon. Gentleman is not entirely in favour of my position on those issues. I caught at least part of it, about the DNA database. Let me explain why it is an important policy for the country and for fighting crime. As a result of the DNA database, we can now match samples, sometimes several hundred and even several thousand a month. Consequently, we are solving murders, rapes and some of the most serious burglaries and assaults. It is essential to use new technology, such as CCTV and other things, to ensure that we make our country safer. The idea that, by doing thatand thereby, for example, solving some of the unsolved murders from years agowe are creating a police state shows how far the Liberal Democrats are out of touch with reality.

Ben Chapman: With the ever-increasing rise in house values, the prospect of further interest rate increases and the Halifax telling us that it is difficult for key workers to find homes in some of our towns, will the Prime Minister assure me that the Government are doing all that they can to ensure that key workers, young people and first-time buyers can get on the property ladder without incurring punitive and potentially dangerous levels of borrowing?

Tony Blair: My hon. Friend raises a crucial issue for the country. It is interesting that his constituency in the Wirral shows that it is not simply a problem of London and the south-east. We have to do three things: invest more in social housing, which we are doing; improve the availability of shared equity schemes, since I think that they will be of great help, especially to young couples buying their first home; but also make available land for development. The simple truth is that, unless we are prepared to make more land available for development and build the homes that people need, prices will be even higher. It is obvious that many young couples are finding it a tremendous struggle to get their feet on the first rungs of the housing ladder, but we cannot solve that unless we are prepared to make the difficult decisions about housing supply.

Ian Paisley: May I associate myself and my Friends on these Benches with the remarks already made from both Front Benches about those who have given their lives for our freedom? May I also ask the Prime Minister whether he is going to come to the opening of the new Assembly to mark the new regime that is going to come into order on 8 May? That is a firm date that is not going to be changed, because the people of Ulsternot any of his Ministershave set it in stone. Although it will be the birthday of his hard-working Home Secretary, I am not asking him to come and celebrate that in Northern Ireland. I am asking him to join the Northern Ireland people to mark the fact that that part of the United Kingdom is going to have a Government in the same way as Wales and Scotland have. It is his duty as Prime Minister to be there, after all the work that he has done on this matter.

Tony Blair: It is not absolutely universal, in my experience, that people actually want me to visit that particular part of the country, but I thank the right hon. Gentleman very kindly for his invitation. Certainly, we have it well in mind.

Kitty Ussher: Will the Prime Minister join me in paying tribute to the nurses, doctors and other health professionals in my constituency whose hard work and dedication have contributed to a 37 per cent. fall in mortality rates from heart disease since 1997? Assuming that he agrees with me that that is also due to the sustained rise in investment in the NHS, will he guarantee today not to threaten that investment by an irresponsible policy of sharing the proceeds of economic growth between tax cuts and public spending?

Tony Blair: The point that my hon. Friend makes is correct, in the sense that the winter report that I mentioned a moment ago shows that the number of cancelled operations has gone down in the past few years by about 30 per cent., and that the rates have hugely improved for people being seen quickly for cancer treatment and in accident and emergency departments. It is also truethis is something that even the Conservatives apparently do not realise any morethat we need to make changes and reforms in the way that the health service works. The report published today by Professor Darzi shows clearly that, as a result of the changes in the NHS, we are moving towards a system in which more care is done in the community and in which the number of day cases has risen by about 1.5 million a year. People can now often get day-case surgery when previously they would have had to spend days in hospital. We are therefore having to change the health care system; that is inevitable. If we manage to carry on making these improvements, by the end of next year the constituents of my hon. Friend and others will have a maximum wait of 18 weeks for diagnostic, out-patient and in-patient treatment, with an average wait of eight weeks. That will be a fundamental change from what we inherited in 1997, when people often had to wait 18 months or more just on the in-patient list.

Simon Hughes: Following the Prime Minister's last answer on housing, is he aware that official figures show that, over the 10 years of this Labour Government, average earnings across Britain have gone up by 41 per cent., while average house prices have gone up 169 per cent.more than four times as much? Is not the truth that, for the millions of people in terrible housing debt, and for those who are not even able to get on to the housing ladder at all, one fundamental thing has not changed

Mr. Speaker: Order.

Tony Blair: It is correct to say that living standards have gone up, and that house prices have gone up significantly. I agree with that, but the answer, as I said a moment ago, is that we must be prepared to release more land for development and to do more brownfield development, which this Government are doing. With the greatest respect to the hon. Gentleman and to the Liberal Democrats, we cannot have a situation in which the Liberal Democrats say that there should be more housing, while locally opposing every development that is proposed. In the end, they, like the Conservatives, have to understand that if the Government want to deal with these problems, hard decisions have to be taken, and the truth is that we take them.

Fiona Mactaggart: What is the Prime Minister's response to the campaign by speeding motorists against the 15 surcharge on court fines that has been imposed on them to finance services for victims of crime?

Tony Blair: That surcharge is paying for a whole range of victim and witness services. It is providing some 3 million for witness care units, and some 3 million for independent domestic violence advisers. If victims feel more comfortable about giving evidence in court, they will be more likely to secure the convictions of those who are guilty. One reason why we have significantly lowered levels of domestic violence is the fact that we are giving more support to people who need to bring such cases to court. The surcharge, although controversial at the time of its imposition, is yet another example of a difficult decision that was fully justified.

Elfyn Llwyd: Is the Prime Minister aware of the widespread hospital closures throughout Wales? Is he also aware that the British Medical Association in Wales has called for an independent review of the working of the Barnett formula to establish whether Wales is being short-changed, as many of us believe it is?
	While the Prime Minister ponders that, may I echo what was said by the right hon. Member for North Antrim (Rev. Ian Paisley) and warmly invite him to visit Wales as many times as he can between now and 3 May? His presence there will dramatically affect voting patterns.

Tony Blair: The hon. Gentleman says that we have been cutting NHS investment in Wales. Actually, we have increased NHS investment in Wales enormously. Ten new hospital schemes are coming to Wales, and waiting times have shortened. People receive vastly improved treatment and receive it faster, and they receive it precisely because of the investment that a strong economy has allowed us to deliver. The truth of the matter is that the policies of the hon. Gentleman's partywell, the leader of the Welsh Nationalist party wants to form a coalition with the Tories, does he not?  [Interruption.]

Elfyn Llwyd: indicated dissent.

Tony Blair: Yes! I remember now! The hon. Gentleman wants to join in a ragbag coalition with the Tories. Well, if he thinks the people of Wales believe that the Tories are better than us at running the national health service, it is he who will be worried on 3 May.

Post Mortems (Nuclear Industry)

Alistair Darling: With your permission, Mr Speaker, I shall make a short statement on the examination of tissue taken from some individuals who had worked in the nuclear industry and who died between November 1962 and August 1991. Having regard to the feelings of the families of those concerned and because it is in the public interest, I want to provide the House with the information available from British Nuclear Fuels Ltd, which operates the Sellafield site where the examinations were carried out. I shall then set out how I intend to proceed with the matter.
	Most of the employees concerned worked at Sellafield, but one individual worked at the Capenhurst nuclear site in Cheshire, and had transferred from Sellafield. There are data, but not medical records, at Sellafield relating to an employee at the Springfields nuclear site in Lancashire and to a further six who worked at Aldermaston. BNFL, which holds the relevant medical records, tells me that to date it has been able to identify 65 cases in which tissue was taken from individuals and analysed for the radionuclide content of organs.
	It is important to tell the House about the limited nature of the records that are held by BNFL. They are medical records, which show what analysis was done on organs removed following post mortem examination. Because they are medical records that dealt with the analysis carried out at Sellafield, they do not provide an audit trail that would show in every case who asked for such an examination, under what authority and for what purpose; nor do they disclose whether the appropriate consent from the next of kin was received. Some records contain more information than others, but at this stage it is simply not clear what procedures were followed in every case.
	From the information that I have, I can tell the House that 23 such requests for further examination and analysis were made following a coroner's inquest. A further 33 requests appear to follow a coroner's post mortem. Three requests were made associated with legal proceedings, and one request was made by an individual prior to death. Therefore, it is assumed that in the majority of these cases requests were made to help establish the cause of death in the normal way. In many cases, that would be part of the coroner's inquiry, but we cannot be sure of that because there is not an audit trail to establish that as a fact. A further single request was made following a biopsy of a living individual. In respect of a further four cases, I understand that the records do not record by what mechanism the request for the analysis was made. Clearly, it is important to establish why these requests were made and for what purpose. It is also clear that the data obtained from these examinations have been used in other studies that were subsequently published. One of the questions that therefore arise is whether it was appropriate to use the data gathered for that purpose.
	It follows from what I have said that the records held by BNFL do not disclose whether the next of kin knew of the examinations and analysis. That needs to be established. Most cases appear to have followed a coroner's request. It is therefore possible that in some cases there was such knowledge, but it is not at all clear that even if the next of kin had known about the analysis they would have been aware that the data gathered were then to be used as part of a wider research study. However, it will be necessary to examine the coroner's records to find out what exactly the position was.
	BNFL tells me that it believes that the tissue would have been destroyed as part of the analytical process. It also believes that although there was storage of the tissue prior to the examination, any tissue that remained would have been destroyed. Certainly BNFL tells me that no such tissue exists today. However, it is not certain at this stage what procedures were followed.
	The House will appreciate that some of these cases go back 45 years. It is simply not possible, therefore, to be sure whether procedures were carried out properly. As I have said, the information held by BNFL is necessarily limited and a fuller investigation is therefore necessary. I believe that it is necessary to establish why these examinations were carried out and whether the next of kin were informed and consented to the analysis. It is also necessary to establish whether any of the examinations were carried out following the correct and proper procedures, and whether the data obtained were used appropriately and with the necessary consents.
	The families and the public will want to know the answers to all those questions. I have therefore asked Michael Redfern, QC, who conducted the Royal Liverpool Children's NHS TrustAlder Heyinquiry to investigate this matter. I have asked him to establish the facts, and to report to me. I will publish the full terms of reference shortly.
	This is clearly a difficult situation, covering events that took place up to 45 years ago. None the less, we owe it to the families, as well as to the public, to find out what happened and why.

Charles Hendry: I thank the Secretary of State for allowing me advance sight of the statement and for notifying both the shadow Secretary of Statewho is abroad and sends his apologies to the Houseand me of this issue as soon as he became aware of it yesterday.
	All Members are shocked and incredulous at what appears to have happened. I join the Secretary of State in expressing our deep sympathy for all the families involved and our wish to see the full facts established as quickly as possible. I therefore welcome his decision to set up an immediate inquiry under Michael Redfern, QC, who has exceptional expertise and authority in this area. That is the right way forward to alleviate the great distress that will be felt today by all the families potentially involved.
	I recognise that the Secretary of State's knowledge of this matter is very recent and that it has been hard for him to establish many of the facts so far, but I hope that he might be able to give some greater detail to the House. At present, many families of former workers at Sellafield and other nuclear locations will be profoundly concerned to know whether their loved ones had body parts removed without their knowledge. When does the Secretary of State expect to be in a position to inform families whether their relatives were among the 65 cases established so far?
	British Nuclear Group has confirmed that files exist for 65 cases, but will the inquiry cover all past employees at Sellafield who died before this practice was stopped in 1992, to ensure that there are not other cases beyond the 65 that British Nuclear Group already knows about? Is it the Secretary of State's understanding that any such post-mortem tests related particularly to those who might have been affected by the fire in pile 1 at Windscale in October 1957? Or does the information that he has received suggest that it might have been a much more general practice?
	The Secretary of State has told us that those involved worked at Sellafield, Capenhurst, Springfields and Aldermaston. Will the inquiry establish whether other nuclear sites might have been involved, and is it his understanding that the issue related purely to civil nuclear personnel, or might military personnel working with our military nuclear programme have been involved?
	As the Secretary of State will know, rule 9 of the coroners rules allows coroners to retain material relevant to the cause of death. Clearly, coroners would not have had the power to allow material to be retained for more general research, and we agree with the Secretary of State that it is paramount that we establish precisely why tissues and organs were retained, to see whether that was entirely legal. Have there been any previous expressions of concern by families about what might have happened? Will the inquiry establish what legal advice was given to British Nuclear Fuels at the time about the legality of removing any body parts? Furthermore, will the inquiry publish the outcome of any research that was carried out on whether there may have been a link between the deaths of those involved and their exposure to radioactivity?
	Will Mr. Redfern establish whether all activity complied with the Human Tissue Act 1961, which provided for inquiries to be made whether the deceased or any surviving relative objected to the retention of organs or tissue? Will he also establish what contact took place between British Nuclear Fuels and the Retained Organs Commission, set up in 2002 after Mr Redfern's earlier inquiry, or subsequently with the Human Tissue Authority, to ensure that all legal obligations were fully complied with?
	Crucially, will the Secretary of State confirm to the House that the inquiry will establish who made the decision to stop the practice and when that decision was made? Will it also establish why the families were not informed when the decision to end the practice was made or whether it was decided simply to try to brush the issue under the carpet? At this stage, does he consider that the inquiry could lead to criminal investigations?
	Finally, on the broader issue, like the Secretary of State, I have visited nuclear plants and I have seen first hand the priority that they attach to safety. The Government want a new fleet of nuclear power stations to be built. Does he accept that public acceptance for that will be undermined if people do not see this issue resolved openly and transparently, and will he therefore emphasise to Mr. Redfern the importance of this inquiry being both thorough and as quick as possible?

Alistair Darling: I am grateful to the hon. Gentleman for the way in which he put his questions. For the sake of clarity, I think that I told the hon. Gentleman and his colleague that it was last Friday when I became aware of the issue. The difficulty in getting information is as I set out. BNFL's medical records deal simply with the examinations. There is no audit trail from the time of the post mortem that indicates who in each case asked for further analysis to be carried out or, at the other end, what happened as a result of the further consideration of the findings.
	The hon. Gentleman asked several questions. I agree with him that it is essential that we have an open process. That is why I have asked Michael Redfern to conduct this investigation as thoroughly as possible. I do not intend to put any constraints on what he considers. He needs to examine all the matters that he thinks are relevant.
	In relation to some of the specific points raised, the hon. Gentleman referred to this practice. From what I have been able to discern, I do not think that it was a routine practice. What happened was that from time to time the coronerin the majority of caseswould ask for further analysis to be carried out. I do not know whether he decided to do that because of something that he was concerned about, or whether he was asked to do it on behalf of the family concerned. If we look at the distribution of the 65 cases over what was a very long period, we realise that it cannot be said to be a practice. Certainly, as I understand it, it was not done routinely. However, one of the issues that Mr. Redfern will wish to consider is why the decisions were taken, and then he will draw the appropriate conclusions.
	I cannot give the hon. Member for Wealden (Charles Hendry) any information on whether any of the people concerned were involved in, or associated with, the 1957 incident, nor can I say whether any of them were military personnel; no doubt Mr. Redfern will want to investigate that.
	The hon. Member for Wealden asked about the research. There has been quite a lot, although I understand that it has been more concerned with the methodology used to calculate radioactivity in organs than with these specific cases. However, it is important to note that the records for the individuals involved are confidential. As a result, I do not knowand neither does BNFLwhat conclusions were reached for each person.
	The final point raised by the hon. Member for Wealden is very important and sensitive. The company, work force representatives and Michael Redfern are urgently considering how to approach the families concerned to explain what happened. The House will appreciate that in some cases the immediate next of kin are, sadly, no longer alive. However, there will be surviving family members: contacting them must be handled sensitively and, as I have told the company today, quickly. The surviving next of kin will be concerned about what happened, and the right thing to do is to explain to them exactly what we know and what we are doing to find the answers to those questions that are not yet resolved.

Harry Cohen: Are any of the body parts radioactive, and is it possible that BNFL has been involved in a cover-up? I remind the House that Ronnie Kray was buried without his brain. Should not the Government take a wider look at the Dr. Frankenstein practice of storing body parts?

Alistair Darling: I have no evidence to back up what my hon. Friend says. As I said in my statement, BNFL has said that it was inevitable that some of the human tissue that it was asked to analyse would have been stored prior to examination. As I understand the matter, that tissue would then have been destroyed in the analytical process.
	The use of body parts that I have described this afternoon has been known about for about 20 years, as research has been carried out using data derived from the examinations. However, Mr. Redfern will face the problem that attitudes have changed, as has the relevant legislation. The practices of the 1960s and 1970s would not be acceptable today, and the Alder Hey inquiry that he carried out addressed some of the same issues. What is paramount, however, is that the families of the people who died and whose organs were examined know what happened. I am determined that they will.

Susan Kramer: I join others in expressing my deep sympathy to the families affected by what went on, and to those who fear that they might be so affected. I am sure that the whole House understands the anxiety that they must be feeling. I also thank the Secretary of State for his attempt to let me know last night about the statement that he has made: if I was elusive, it was because I was in the House.
	I very much welcome the inquiry that the Secretary of State has announced. Although I recognise that he had no information about the matter until last Friday, and that the events about which we have heard took place quite a few years ago, I reiterate that we believe that it is very important that citizens are respected in death as they are in life. The ghastly nature of the events that have been described means that it is important to establish that body parts should not be used for research without the appropriate permissions.
	However, I want to ask the Secretary of State a number of questions. He talked about the difficulty of accessing information and coroners' records. When the events that have been described took place, a Government authority, the Central Electricity Generating Board, managed our nuclear power plants. Were the CEGB records fully transferred to BNFL, or have some of them stayed in the Government's possession, perhaps even in the archives of the Department of Trade and Industry? Has he researched that angle, as the information contained in them would clearly be vital?
	As the Secretary of State said, the Alder Hey investigation took place a few years ago, so it is beyond belief that other organisations, especially those associated with Government in any way, shape or form, should not have seen that event as a trigger for their own investigations into practices that might have operated in their organisation. Will the right hon. Gentleman ask the inquiry to explore why the decisions and events at Alder Hey did not lead to disclosure of the series of events in this case some years ago? That leads to the obvious question that if BNFL did not use that opportunity to examine its records, which other organisations failed to do so, too?
	The hon. Member for Wealden (Charles Hendry), who spoke for the Conservatives, mentioned the other nuclear facilities that may have been involved and the possibility that the practice extended to military as well as civilian personnel, which we believe ought to fall within the remit of the investigation. Will the Secretary of State emphasise that point?
	There are particular concerns that there may have been far more extensive practice at the Atomic Weapons Establishment at Aldermaston and Burghfield than has been revealed by the cases that have surfaced so far, so the question in everybody's mind is whether the 65 cases are the tip of an iceberg or are they

Mr. Speaker: Order. May I point out to the hon. Lady that she has taken more than three minutes?

Alistair Darling: Perhaps I can deal with the points that the hon. Member for Richmond Park (Susan Kramer) has made. It is more likely that the UK Atomic Energy Authority held the records rather than the Central Electricity Generating Board, but one of the things that Mr. Redfern will want to look at is whose responsibility it was. As I said in my statement and in reply to the hon. Member for Wealden, it is important to remember that the analysis was undertaken at Sellafield because that is where the expertise was. In many cases, the analysis was being undertaken either at the requestit would appearof a coroner as part of his wider inquiry or, in a smaller number of cases, as part of legal proceedings. It is not clear whether the families concerned knew whether further analysis was being performed in those cases, but it is clear that the main inquiry was being conducted by a third party; in other words, not BNFL or its predecessors.
	In relation to the hon. Lady's call for a wider inquiry, I want Mr. Redfern to find out what happened in this set of cases. If we go wider, we shall not get the answers that the families want in anything like a reasonable time scale. On her point about research, analysis of the tissues was carried outoften, it would appear, at the request of a coronerto find the cause of death, and that point is fairly well known. As I understand it, the research was derived from the data found, and a lot of it involved looking at the methodology used to calculate the effect of radioactive material. I understand that the research has been fairly well published, although that is not to say that the families concerned would have known about ita point I made earlier. Mr. Redfern will look at what should have happened with regard to the law prevailing at the time and so on. The law is quite different now and is much tighter, thanks to legislation published two years ago following Alder Hey, but those issues need to be examined.

Ian Gibson: Although I welcome the alacrity with which my right hon. Friend has moved, will he consider extending the remit of the inquiry to the nuclear submarine industry, where there is a long history of people being affected? Given the relevance of our nuclear developments at present, we ought to cover our tracks there, too, before we proceed.

Alistair Darling: No, I do not agree. I want to get to the bottom of what happened in this casethat is what the families want and there is a public interest in finding out. My hon. Friend refers to something far wider and there have been a lot of studies on such general matters, but this inquiry needs to look at what happened in these cases.

Peter Luff: Does the Secretary of State agree that the difficult issue with which he has dealt so appropriately and sensitively today could be seen as just the latest manifestation of the nuclear industry's past reputation for a dangerous combination of unbridled optimism, alarming scientific naivety and obsessive cold war secrecy? Bearing in mind the new consultation that the right hon. Gentleman is conducting into the future of nuclear power and, indeed, tomorrow's debate on the subject in Westminster Hall, does he agree that the nuclear industry has everything to gain from the maximum possible openness on this and every other issue?

Alistair Darling: Yes, I do. I have said on numerous occasions that the industry could help itself enormously by being open. If there are problems, let us discuss them. If things went on the past, let us hear about themsubject, of course, to observing sensitivities and the confidentiality to which families are entitled. It is far better to be open about these things. As far as we understand, the practice stopped in the early 1990s and it was not until the company was approached to see whether it would allow the data gathered to be used for further general research that people focused on what had happened. People's attitudes now are quite different from the 1960s, whenthe hon. Gentleman is rightthe whole history of the nuclear industry was that given the choice between being open or secretive it was secretive. That has to change, and I hope the inquiry will help the process along.

Jamie Reed: I thank my right hon. Friend for the thorough and swift way in which he expedited the investigation once he became aware of the facts as we understand them at the moment. When he establishes the terms of reference for the investigation by Michael Redfern QC, will he ensure that as the facts emerge the families of those affected are the first to be informed? There is already some wilfully misleading reportage in the media today, but that must not be allowed to distress the families further.

Alistair Darling: My hon. Friend is well aware of the difficulties. I agree that we need to make sure that we handle things sensitively. Michael Redfern clearly has experience of doing that from his last inquiry and he will want to do everything he can to make sure that the families are not distressed further. One of the things in which he will want to be involved at an early stage is how the families are approached, so that we can explain what is happening now as well as giving them as much information as possible about what happened to their next of kin in the past.

John Thurso: It will come as no surprise to the Secretary of State to hear that I have already received representations from constituents regarding Dounreay. Is he able to give any reassurance about Dounreay, or any other UKAEA site, and if notas may be the casedoes he agree that the matter should be looked at as part of the inquiry?

Alistair Darling: I have given as much detail as I possess about where the individuals worked. I have no information to suggest that any of them worked at Dounreay. If someone had died in Caithness and there had been further investigation, I am not sure that further analysis would necessarily have been carried out at Sellafield, but I have no information about that. As I said earlier, it is important that we have a fair idea about this problem and I want Mr. Redfern to concentrate on that. I do not want the inquiry to become so wide that we cannot reach conclusions from which we can learn. If it comes to light that anyone working at Dounreay or any other establishment was affected, that information will certainly be part of Mr. Redfern's considerations.

David Drew: On that note, will my right hon. Friend accept that those of us with nuclear stations, or former nuclear stations, in our constituencies would like reassurance that the practice did not apply at those facilities? Will he, at the very least, press BNFLnow the British Nuclear Groupto make a quick investigation to put our minds and the minds of our constituents at rest, so that we know what we are dealing with?

Alistair Darling: The investigation needs to centre on the post mortem investigations and further analysis carried out at Sellafield. That is what we are talking about. In respect of the deaths of people working in other parts of the industry, it is not possible to say whether the coroner, the families or anyone else asked for further analysis to be carried out elsewhere. That would be a different body of work. I am keen to resolve the questions that have arisen about examinations carried out at Sellafield; we need to know why and on what authority and whether the families were told. We then need to learn from whatever conclusions Mr. Redfern draws.

Michael Weir: I welcome the Secretary of State's swift action in setting up the inquiry under Michael Redfern. However, to follow up the question from the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), it is important that we do not get into a situation in which a drip, drip of cases come out from other nuclear installationsif there are such cases. The Secretary of State will be aware that there is no coroners' system in Scotland. There is a different system for unexplained or sudden deathssuch deaths are presumably why the coroners were looking into these matters. Will he assure us that, should there be any indication that any Scottish installation or anyone resident in Scotland has been involved in this matter, there will be a full investigation with the relevant Departments in Scotland to ascertain what information is held in the Scottish system?

Alistair Darling: The hon. Gentleman is right to the extent that a sudden death is a matter for the procurator fiscal. I suppose this point follows on from the point that was just made by my hon. Friend the Member for Stroud (Mr. Drew). There could be cases where someone has died and the procurator fiscal, or coroner in England, or members of the family, have asked for further analysis. That could have been carried out anywhere in the country, but not at Sellafield. I am not sure whether it would be a practical proposition to find out whetherand how oftenthat has happened over the past 45 years.
	We know from the information that we have now that in the 65 cases to date, those involved were subject to further examination at the Sellafield site. We also know that the data that were obtained from those examinations have been used in subsequent research. That is something quite distinct and we know that much about it. We need to find out more. As I said to the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), if further information comes to light that is relevant to the consideration that I have asked Mr. Redfern to look at, of course he will look at it.

Alasdair McDonnell: I thank the Secretary of State for the speed with which he has tackled the problem and come to the House with the information at his disposal. I welcome the inquiry and share the sympathy for the families and the deep concerns about the great distress that the matter will cause them. I hope that the inquiry is comprehensive enough to alleviate the distress and the concerns of the families. Where I am coming from, I see the problem for British Nuclear Fuels Ltd. and for the Government as a very different problem from that perceived by the public. There is a Frankenstein implication when it comes to people and nuclear radiation.
	I would like to persuade the Secretary of State, if at all possible, not just to include in the inquiry the whys and wherefores of the unauthorised retention of tissue, but to spend a small amount of time on what medical information was gleaned from the biopsies and what other research was established. People's minds are uneasy about this matter. It has serious implications for those of us across the Irish sea, where there appear to be significant pockets of cancer created by nuclear spills at Sellafield.  [ Interruption. ] People may say that that is not true, but it is true. They should talk to some of the people with whom I live. The coastal areas of Antrim and Down are contaminated at times. People in Northern Ireland have concerns, and they will approach me with those concerns.

Alistair Darling: The hon. Gentleman is one of a small number of hon. Members who have spoken today who are asking for something that seems more akin to a general inquiry into the nuclear industry, and I will not agree to that because it is not right in the context of this inquiry. I have asked Michael Redfern to look at the matter, primarily because I am greatly aware of the sensitivities in relation to the individual families and because it is in the public interest to find out what happened. What was published is freely available, but I will arrange to put in the House Library those publications that I understand derived from the research. I will endeavour to do that in the next day or so.

Richard Taylor: May I add a historical perspective? It is sadly needed. Anybody who worked or trained as a doctor in the '60s and '70s knows that the standard of obtaining consent for post-mortems was abysmally low. In hospitals, it was left to the most junior houseman to ask. No detail was mentioned. It was also well known among members of the medical profession that it was automatic to retain certain amounts of body tissue for examination afterwards. In the '60s and '70s, and until the desperate Alder Hey disaster, it was not recognised that that should form a separate request. In 2007, it is probably hard to recognise that, but we have to be realistic about what the standards were at the time. Regrettably, it is probably still necessaryanother hon. Member drew attention to this factto remove a whole brain if one has to examine it, because it cannot be fixed in the short period of time during the post-mortem. Obviously, that is now asked for specifically.

Alistair Darling: The hon. Gentleman makes a good point. I said earlier that it is difficult to judge those who were responsible for these matters in the 1960s by today's standards, because the mores, law and practice are different. However, the question has arisen and the relatives are entitled to know what happened. They may be distressed by what happened and they may strongly disapprove of it, but they are entitled to know. I hope that the inquiry will help us to establish what happened. I entirely agree that it is difficult to judge people who were working 40 years ago by the standards that we might apply today.

Peter Bottomley: The Secretary of State rightly said that people need to know, where possible. I put it to him that he should consult the Health and Safety Executive and the royal colleges on the terms of reference. Even though the inquiry may be limited, its implications for research for medical purposes, and for our safety and the analysis of risk, will matter. If people are not able to reuse data in the future, we may find that that has implicationsas in the past, when we did not pick up on the dangers of asbestosis or pneumoconiosis or other things that have killed many more people than any possible deaths attributed to the nuclear industry. He should take great care in not letting the matter go beyond his proper purpose into some way of saying that nuclear is uniquely dangerous, when we know that it is not.

Alistair Darling: As I told the House, what is important, first and foremost, is to find out what happened. In my short statement, I quite deliberately avoided widening the inquiry into matters that, frankly, would be difficult to resolve within anything like a reasonable time. I understand the point that the hon. Gentleman makes about the repercussions. One of the reasons why I asked Michael Redfern to look at this matter is precisely that he has some experience, following the Alder Hey inquiry, and he will be well aware of the fact that his recommendations led to a change in the law just a couple of years ago. In relation to the final point: yes, the workers were employed in the nuclear industry, but we need to get these things into perspective. The nuclear industry has had its problems in the past, but it would be a big mistake to draw any conclusions from what we know today or to develop that into a wider criticism of the whole nuclear industry per se.

Evan Harris: This is a serious matter and an inquiry is justified, but we have to be aware of the unforeseen and damaging consequences of the fallout from the Alder Hey inquiry, with the impact on hospital interest post-mortems and recruitment and capacity in the pathology profession. Will the Secretary of State endeavour to ensure that the comments made reflect the value of properly consented post-mortem examinations and the fact that the storage of tissue, properly consented, is not a Dr. Frankenstein practice, but a vital part of diagnosis, research and training? Finally, will he ensure that doctors are not demonised when they are acting in good faith by the standards of the time?

Alistair Darling: I largely agree with the hon. Gentleman. It is important to reiterate the value of post-mortem examination and further analysis, because only by that can we learn for the future. Many people working in medicine and science could not do their work if they were unable to carry out that researchand most members of the public understand that. The law now is, broadly, that the next of kin have to consent, though there is an obvious exception in respect of coroners. The position now is, of course, different from 40 years ago. As I said to the hon. Member for Wyre Forest (Dr. Taylor), it would be wrong to judge people who were operating in the 1960s by the laws and standards of 2007, as that would be unfair. I agree that it is important to recognise the value of these further investigations. I reiterate that what I want to find out and what the familiesand the publicwant to know is what happened in this particular case. We should be very careful about drawing premature conclusions for which there is no evidence one way or another. We should address the issue in a measured and balanced way, with all the sensitivity that the situation requires.

Childcare Provision (Wales)

Chris Bryant: I beg to move,
	That leave be given to bring in a Bill to make further provision in relation to child care facilities in Wales, and for connected purposes.
	There are people who believe that poverty is a fact of life, and there are people who believe that many should live in poverty because that is the way of the world. I profoundly disagree, as I believe that poverty is not some mysterious dispensation that descends from heaven on some families and not on others. I also believe that one of the first duties of Government is to try to tackle the inequalities between rich and poor, between rich countries and poor countries and between rich areas and poor areas of a country. It is particularly important to tackle the inequity that is child poverty.
	I believe that the single best means that Governments have of tackling child poverty is to enable parentswhether they be lone parents or happily married or cohabiting couplesto work. I think so for two main reasons. First, work brings money into the household, and what better way is there to tackle poverty than by ensuring that money is available in the household? I am glad that the Government have done so much over recent yearsthrough child tax credits, working tax credits and the national minimum wageto make sure that work pays. Secondly, it is also important for parents to be able to work because it gives them the social contact that is essential for their families to flourish.
	The statistics clearly support my case. International figures for child poverty and parents in work show a remarkable correlation. The country with the lowest level of child poverty is Sweden, with only 4.2 per cent. of children growing up in child poverty. What is the number of women with children in work in that country? It is 76.6 per cent.70 per cent. of women with children under three and 80 per cent. with children over three. That shows a clear correlation because Sweden is the country with the highest proportion of mothers in work and the lowest proportion of children living in poverty.
	In the United States of America, on the other hand, merely 58 per cent. of women with children are in work and 21.9 per cent. of children grow up in poverty. Sadly, Britain is closer to the American level than to the Swedish level, with 57 per cent. of women with children in work and 15.4 per cent. of children growing up in poverty. When the Government came to power, we were at the bottomthe absolute bottomof the league for child poverty in Europe. I believe that that was because there was systematic ignorance and deliberate carelessness about child poverty on the part of previous generations of Governments. I am glad that we have managed to lift ourselves from the bottom of the league, but we are still only half way up. That is why I want us to tackle, with increased energy, the issue of child care provision, particularly in Wales.
	I am proud of some things that the Government have done. I am proud of Sure Start and how its rolling out made it possible for many parents to get into work. I am proud of the additional 23,000 child care places introduced in Wales over the past eight years. I am proud of the 12.5 million of European Union structural funds that have been secured to spend on child care in Wales. I am proud, particularly in respect of the Rhondda, of Flying Startthe new scheme now coming on track, whereby significant extra resources of health visitors are being provided. As well as making a difference on child care, we need to ensure that parents with health problems have the support that they need to get into work. Also important are free part-time child care for the poorest members of our community and tackling deprivation in the poorest wards in my constituency. I am proud of all of that.
	Very significant problems remain, however. There is still not enough child care available. Quite simply, there are not enough places for everyone who wants to go to work to place their child in proper child care. There are many reasons for that. One is that child care is not greatly valued in society, which is why it is still not valued highly as a career. Many of the people working in child care are on the national minimum wage. At a time of relatively high levels of employment and relatively low levels of unemployment, alternative careers are available, which has made it difficult to recruit people to work in child care.
	There is also a significant problem with buildings. Should we not have a sense of shame about the fact that very few Members could cite a single child care building that was expressly built for that purpose? In other countries, many thousands of buildings were expressly built for that purpose, yet we end up using buildings that were built in the 19th century for completely different purposes.
	The cost of child care is still prohibitive for many parents, which makes it difficult for them to make the choice to work. There is still a lack of flexibility. Many child care facilities insist that parents have to use them for a full week rather than just two days. Parents say that they want only part-time child care and if they cannot have it, they cannot decide to go into work. We need to meet more accurately the pattern of work by which people live their lives. That often means making provision close to home and close to places of work. Many people in the Rhondda who may work in Cardiff, Newport, Swansea or elsewhere need very flexible arrangements if they are to take the opportunity of going into work.
	We also need to make it possible to cope with crises. Many lone parents who have courageously gone off benefits and into work with excitement and glee are able to cope with the expected crises of the year, such as school holidays, because members of their extended family may be able to help. What is really difficult for them to cope with, however, is the unexpected crisis, when a child or parent is ill. That is why the new idea espoused by the Welsh Assembly Government, to which Labour is committed in its manifesto for Wales, is so important. I refer to the idea of having mobile mammas who will be able to provide the crisis support for child care at the moments when lone parents really need it. It will make a dramatic difference in the years to come.
	Sometimes child care provision does not feel as inclusive of every young parent as it might. One young parent told me that it was great going along to many of the new facilities and everyone was very welcoming, but it sometimes felt like a gathering of the middle classes. Everyone was chatting away about how to cultivate organic pears, but they did not seem to have a proper understanding of how child care might fit their particular personal needs. We need to go much further in making child care available, particularly to those who have gone forward with teenage pregnancies.
	Two very important principles are relevant. First, there should be no compulsion. We should not be forcing every single parent to put their child into child care and go into work, but we certainly should make it possible for every single parent to have that option. Also, child care should not mean just warehousing. Some people have been concerned about recent reports suggesting that children who have grown up in child care that effectively places babies in a row and leaves them there for several hours turn out to have more social problems later in life than others who did not go through that.
	The role of the mother will always be vital in bringing up a child, and child care should not be an alternative to the role of the mother. It is vital that every child learn the difference between a frown and a smile from one person, and the primary person in that role will always be the mother. But it is important, too, that we give opportunities for people to go into work. It is absolutely vital that we get this right. We should not have a stop-start approach to child care; there should not be a new idea every two or three years, because we must introduce a generational change.
	I wholly support the Welsh Assembly's idea of mobile mammas, because that will make it much easier for young mums in particular to cope with crises. It is important that we investigate whether we should have a universal right to child care, as parents enjoy in Sweden. It is important that we have a recruitment campaign to ensure that more people have access to child care. Finally, there are 1,420 lone parents on benefit in the Rhondda. We must not fail them, and we must not fail their children either.
	 Question put and agreed to.
	Bill ordered to be brought in by Chris Bryant, Jessica Morden, Julie Morgan, Mrs. Moon, Chris Ruane, Ian Lucas, Albert Owen, Alun Michael and Mr. David.

Childcare Provision (Wales)

Chris Bryant accordingly presented a Bill to make further provision in relation to childcare facilities in Wales; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 October, and to be printed [Bill 91].

Pensions Bill (Programme) (No. 2)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6) (Programme motions),
	That the Order of 16th January 2007 (Pensions Bill (Programme)) be varied as follows:
	1. Paragraphs 4 and 5 of the Order shall be omitted.
	2. Proceedings on consideration shall be taken in the order shown in the first column of the following Table.
	3. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
	
		
			 TABLE  
			  Proceedings  Time for Conclusion of Proceedings 
			 New Clauses and amendments relating to the Financial Assistance Scheme. Two and a half hours after the commencement of proceedings on the motion for this Order. 
			 New Clauses and amendments relating to Part 3. Four hours after the commencement of proceedings on the motion for this Order 6.00 pm. 
			 Remaining proceedings on consideration  
		
	
	4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 7.00 p.m. [James Purnell.]
	 Question agreed to.

Orders of the Day

Pensions Bill

[Relevant documents: The Fourth Report of the Work and Pensions Committee, Session 2005-06, on Pension Reform, HC 1068, and the Government's response thereto, Cm 6956.]
	 As amended in the Public Bill Committee, considered.

New Clause 38
	  
	Financial assistance scheme: increased levels of payments

'(1) Section 286 of the Pensions Act 2004 (c. 35) (financial assistance scheme for members of certain pension schemes) is amended as follows.
	(2) After subsection (1) insert
	(1A) The Secretary of State must, in particular, make provision for securing that (subject to any relevant restriction) the aggregate amount of
	(a) any annual payment payable to a qualifying member of such a scheme, and
	(b) the member's actual pension (if any),
	is not less than 80% of the member's expected pension, irrespective of the date of his attaining normal retirement age (or the date when he would have attained that age if he dies before attaining it).
	(1B) A relevant restriction means any provision of the regulations which
	(a) operates to restrict the amount of an annual payment by means of a cap on the product of the calculation of a specified fraction of the member's expected pension, or
	(b) provides for an annual payment not to be payable where the member's actual pension exceeds any specified amount.
	(3) In subsection (2), before the definition of qualifying member insert
	actual pension and expected pension, in relation to a qualifying member of a qualifying pension scheme, mean the amounts which, in accordance with regulations under subsection (1), are to be taken into account as the member's actual pension and expected pension, respectively, in determining the amount of any annual payment payable to the member;
	annual payment has the meaning given by regulations under subsection (1);.
	(4) Subsections (5) and (6) below apply where the scheme manager has determined that an initial payment may be made under the FAS regulations to or in respect of a qualifying member of a qualifying pension scheme, and they so apply whether the determination
	(a) has been made, or
	(b) relates to a period beginning,
	before or after the passing of this Act.
	(5) Subject to any relevant restriction, the amount of any such initial payment payable to the member is to be
	(a) the amount of the member's expected pension multiplied by 0.8, less
	(b) the amount of the member's interim pension (if any),
	irrespective of the date of the member attaining normal retirement age (or the date when he would have attained that age if he dies before attaining it).
	(6) The amount of any such initial payment payable to the survivor of the member is to be
	(a) whichever is the smaller of
	(i) one-half of the product of the calculation in subsection (5)(a), or
	(ii) one-half of the product of that calculation as reduced by virtue of any relevant restriction,
	less
	(b) the amount of the interim pension payable to the survivor (if any),
	irrespective of the date of the member attaining normal retirement age (or the date when he would have attained that age if he dies before attaining it).
	(7) In subsections (5) and (6) relevant restriction means any provision of the FAS regulations which
	(a) operates to restrict the amount of an initial payment by means of a cap on the product of the calculation of a specified fraction of the member's expected pension, or
	(b) provides for an initial payment not to be payable where the member's interim pension exceeds any specified amount;
	but for the purposes of those subsections any such specified fraction is to be taken to be 0.8.
	(8) Any provision of the FAS regulations which is inconsistent with subsection (5) or (6) is of no effect to the extent of the inconsistency.
	(9) The Secretary of State may by regulations
	(a) amend subsection (5) so as to substitute for the fraction for the time being specified there such fraction as is specified in the regulations, and
	(b) make a corresponding amendment in subsection (7).
	(10) No regulations may be made under subsection (9) unless a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.
	(11) In this section
	expected pension and interim pension, in relation to a qualifying member of a qualifying pension scheme, mean the amounts which, in accordance with the FAS regulations, are to be taken into account as the member's expected pension and interim pension, respectively, in determining the amount of any initial payment payable to, or in respect of, the member;
	the FAS regulations means regulations under section 286(1) of the Pensions Act 2004 (c. 35);
	initial payment has the meaning given by the FAS regulations;
	interim pension, in relation to the survivor of a qualifying member of a qualifying pension scheme, means the amount which, in accordance with the FAS regulations, is to be taken into account as the interim pension payable to the survivor in determining the amount of any initial payment payable to the survivor;
	qualifying member, qualifying pension scheme and scheme manager have the same meaning as in section 286 of the Pensions Act 2004 (c. 35);
	survivor has the meaning given by the FAS regulations.'. [James Purnell.]
	 Brought up, and read the First time.

James Purnell: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to discuss the following:
	Amendment (a), in line 9, leave out from 'than' to end of line 11 and insert
	'the amount that would be paid in the same circumstances in payments made in accordance with the pension compensation provisions set out in Schedule 7, save that references to the Board shall be read as references to the Scheme Manager defined in subsection (3).'.
	New clause 11 Financial Assistance Scheme
	'(1) The Secretary of State shall commission an independent review of the Financial Assistance Scheme having regard (among other things) to
	(a) the efficiency and cost effectiveness of its administration;
	(b) whether it could be more effective if administered by the staff of the Pension Protection Fund;
	(c) whether it is adequately financed;
	(d) what other sources of finance could be made available, including but not limited to unclaimed assets;
	(e) whether it should be engaged in the purchase of bulk annuities.
	(2) The Secretary of State shall publish the findings of such review within six months of this Act coming into force.'.
	New clause 24 Financial Assistance Scheme (No. 2)
	'(1) The Pensions Act 2004 (c. 35) is amended as follows.
	(2) In section 286 (financial assistance for members etc.) insert after subsection (3)
	(3A) Regulations under subsection (1) must provide that the payments to be made to or in respect of qualifying members shall be of the same amount, and shall be paid in the same circumstances, as payments made in accordance with the pension compensation provisions set out in Schedule 7, save that references to the Board shall be read as references to the scheme manager defined in subsection (3)..'.
	New clause 25 Financial Assistance Scheme: eligibility where employers remain solvent
	'(1) The Pensions Act 2004 (c. 35) is amended as follows.
	(2) In section 286 (financial assistance for members etc.) insert after subsection (2)
	(2A) Conditions prescribed under paragraph (c) in the definition of qualifying pension scheme in subsection (2) shall not exclude schemes which have been wound up in the absence of an insolvency event as referred to in Part 2..'.
	New clause 26 Financial Assistance Scheme (No. 3)
	'(1) Section 286 (financial assistance for members etc.) of the Pensions Act 2004 (c. 35) is amended as follows.
	(2) After subsection (1) insert
	(1A) The regulations must provide, save for any necessary changes, that each person who would have had an entitlement to payment as compensation under Schedule 7 (Pension Protection Provisions), if each qualifying pension scheme had been an eligible scheme for which the Board had assumed responsibility as specified in paragraph 1 of that Schedule, is given an equivalent entitlement to payment.
	(3) Omit subsections (6) and (7).'.
	New clause 27 Financial Assistance Scheme (No. 4)
	'(1) Section 286 (financial assistance for members etc.) of the Pensions Act 2004 (c.35) is amended as follows.
	(2) After subsection (4) there is inserted
	(4A) The regulations must provide (subject to any changes which the Secretary of State may consider necessary) that each person who would have been entitled to compensation under Schedule 7 (pension compensation provisions) is given an equivalent entitlement to such compensation, whether or not each qualifying pension scheme has been an eligible scheme for which the Board had assumed responsibility as specified in paragraph 1 of that Schedule..'.
	New clause 39 Amendments to Financial Assistance Scheme Regulations 2005 (No. 1)
	'(1) The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are amended as follows.
	(2) In regulation 5(1) for Secretary of State substitute Board of the Pension Protection Fund (the Board).
	(3) In regulation 5(2)(a) leave out from Secretary of State to end of sub-paragraph and insert the Board.
	(4) In regulation 5, sub-paragraph 2(b) is omitted.'.
	New clause 40 Amendment to the Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) (No. 2)
	'(1) The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are amended as follows.
	(2) In regulation 9, paragraph (c) is omitted.
	(3) Regulations 11 to 13 are omitted.'.
	New clause 41 Pensions Protection Lifeboat Fund
	'(1) There shall be established as soon as reasonably practicable a Pension Protection Lifeboat Fund (the Lifeboat Fund) which shall be administered by the Board of the Pension Protection Fund (the Board).
	(2) The purpose of the Lifeboat Fund shall be to make supplementary payments to persons who are qualifying members of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 (S.I. 2006/1986) (or who would be qualifying members if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age), in addition to the sums payable in any event under those regulations.
	(3) The supplementary payments made to any person in accordance with subsection (2) shall equal the amount that, taken together with any amounts payable to that person under the Financial Assistance Scheme and amounts payable to that person as scheme benefits under the qualifying pension scheme in respect of which he is a qualifying member of the Financial Assistance Scheme (or would be a qualifying member if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age), is the amount that would be payable to that person if that qualifying pension scheme was accepted into the Pension Protection Fund.
	(4) The Secretary of State shall make such loans to the Lifeboat Fund as are necessary to allow the discharge of its functions and in particular its obligation to make supplementary payments under subsection (2).
	(5) The Secretary of State shall make such loans from time to time having regard to
	(a) requests for such loans received from the Board;
	(b) the amount of assets transferred or to be transferred to the Lifeboat Fund under the Scheme (as defined in section [Transfer of unclaimed assets] (the Scheme));
	(c) the level of any claims on the Lifeboat Fund in respect of assets transferred to it under the Scheme.
	(6) Loans made in accordance with this section must be repaid to the Secretary of State as soon as, in the reasonable opinion of the Board, it is prudent to do so having regard to
	(a) the obligations of the Lifeboat Fund;
	(b) the amount of assets transferred or to be transferred to the Lifeboat Fund under the Scheme; and
	(c) the level of claims on the Lifeboat Fund in respect of assets transferred to it under the Scheme.
	(7) Loans made under this section shall be interest free.
	(8) The assets of the Lifeboat Fund shall be held separately from the assets of any other fund under the control of the Board.
	(9) The Secretary of State may by regulations make further provision in connection with the Lifeboat Fund.
	(10) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.'.
	New clause 42 Pensions Unclaimed Assets Recovery Agency
	'(1) There shall be a body called the Pensions Unclaimed Assets Recovery Agency (the Agency).
	(2) The Agency must be established no later than three months after the passing of this Act.
	(3) The Agency shall consist of not fewer than six nor more than twelve members to be appointed by the Secretary of State, and the Secretary of State shall appoint one member to be the chairman, and another member to be a deputy chairman, of the Agency.
	(4) In appointing a person to be a member of the Agency, the Secretary of State shall have regard to the desirability of appointing persons who have knowledge of, or experience relating to, matters relevant to the functions of the Agency.
	(5) A member of the Agency may hold office for such a period as the Secretary of State may determine, but not exceeding
	(a) six years, in the case of the chairman, and
	(b) four years, in the case of other members.
	(6) The Secretary of State may make payments to the members of the Agency by way of remuneration and make payments to them in respect of expenses incurred by them in the performance of their duties.
	(7) The Secretary of State may also defray any other expenses of the Agency.'.
	New clause 43 Functions of the Pensions Unclaimed Assets Recovery Agency
	The functions of the Agency are
	(a) to obtain such information about such classes of unclaimed assets as may be prescribed by the Secretary of State by regulations;
	(b) to provide the Secretary of State with that information and any other related information held by the Agency which the Secretary of State may from time to time require;
	(c) to administer the scheme to be established by virtue of section [Transfer of unclaimed assets].'.
	New clause 44 Pensions Unclaimed Assets Recovery Agency: provision of information
	'(1) Subject to subsection (2) below, the Agency may, by notice, require any person to supply it, within a specified period or at a specified time or times, such specified information as the Agency considers it needs for the purposes of carrying out its functions under section [Function of the Pensions Unclaimed Assets Recovery Agency].
	(2) This section does not authorise any requirement in relation to information to be imposed on any person unless that person carries on a business in the United Kingdom; but a requirement may be imposed under this section on a person in relation to information in the possession or control of a connected person or undertaking outside the United Kingdom.
	(3) Any person who, when required to do so under this section, fails without reasonable excuse to supply any information, shall be liable on summary conviction
	(a) to a fine not exceeding level 5 on the standard scale; and
	(b) in the case of a continuing offence, to an additional fine not exceeding 200 for every day during which the offence continues.
	(4) Any person who knowingly or recklessly supplies any information which is false or misleading shall be liable
	(a) on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both; and
	(b) on summary conviction, to a fine not exceeding the statutory maximum.'.
	New clause 45 Transfer of unclaimed assets
	'(1) The Secretary of State shall by regulations, not later than twelve months after the passing of this Act, establish a scheme (the Scheme) for the transfer of such unclaimed assets as the regulations shall prescribe to the Lifeboat Fund.
	(2) Regulations made under this subsection shall provide for
	(a) a definition of those unclaimed assets to which the Scheme applies, including the extent to which the Scheme is applicable to assets whose ownership is known, or can be determined;
	(b) the transfer to the Lifeboat Fund of a prescribed proportion of such unclaimed assets as the regulations shall prescribe, and the manner and timing of such transfers;
	(c) the transfer to the Lifeboat Fund of liability for any claim in respect of assets transferred under the Scheme to the Lifeboat Fund;
	(d) penalties to be imposed on any person holding assets prescribed under subsections (1) or (2)(b) who fails to transfer them or such proportion of them as is prescribed in accordance with the Scheme.
	(3) The power to make regulations under this section is exercisable by statutory instrument.
	(4) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.'.
	New clause 46 Purchase of annuities
	'The Secretary of State shall, as soon as is reasonably practicable, by regulations require the trustees of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 which have not yet completed winding-up to desist from purchasing (except where, on or before 18th April 2007, they have entered into a binding contractual commitment so to do) or making binding commitments to purchase, annuities on behalf of scheme members, for a period of nine months from 18th April 2007.'.
	New clause 47 Duty to make on-account payments
	'(1) Pursuant to his powers under section 286(3)(d) of the Pensions Act 2004, the Secretary of State shall as soon as is reasonably practicable make regulations requiring trustees of qualifying pension schemes to make on-account payments to qualifying members, or persons who would be qualifying members if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age.
	(2) The Secretary of State may make such loans to trustees of qualifying schemes as appear to him to be expedient to enable them to make such on-account payments where adequate scheme assets appear to him not to be available to them and regulations may prescribe for the recovery of such loans upon completion of wind-up of a qualifying scheme.
	(3) Regulations made under subsection (1) above shall provide that on-account payments shall equal the amounts that would be payable if the qualifying scheme was accepted into the Pension Protection Fund.
	(4) The regulations shall provide for payment to trustees of a qualifying pension scheme of payments due to a qualifying member of that pension scheme (or a person who would be a qualifying member if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age) by the Financial Assistance Scheme or by the Lifeboat Fund (as defined in section [Transfer of unclaimed assets]) in respect of periods for which on-account payments to that member have been made in accordance with subsection (1).'.
	Government amendments Nos. 19, 20 and 21.
	Amendment No. 14, in schedule 7, page 69, line 38, at end add
	'Part 7
	FINANCIAL ASSISTANCE SCHEME
	
		
			 Citation Extent of repeal 
			 Pensions Act 2004 (c. 35) Section 286(6) and (7) 
		
	
	Amendment No. 17, in title, line 4, after 'Authority;', insert
	'to establish the Pension Protection Lifeboat Fund;'.
	Amendment No. 18, in title, line 4, after 'Authority;', insert
	'to make provision for the transfer of a proportion of unclaimed assets to the Pension Protection Lifeboat Fund;'.
	Amendment No. 22, in title, line 4, after 'Authority;', insert
	'to make provision about the establishment and functions of, and to confer powers on, the Pensions Unclaimed Assets Recovery Agency;'.

James Purnell: New clause 38 deals with the important issue of failed company pensions and the financial assistance scheme. In my speech, I want to set out three things: first, how the scheme will now guarantee 80 per cent. of expected core pensions to all 125,000 people affected, in contrast to the Opposition, who said that they would not put any more taxpayers' money into the scheme; secondly, how a review, led by industry experts, will look at topping up that 80 per cent., looking in particular at pooling assets; but thirdly, how we should wait for the outcome of that review, rather than voting for the Conservative amendments, which have already been condemned by the Association of British Insurers.
	Many Members in the Chamber today have constituents who lost their pensions because their companies went into insolvency with the scheme underfunded. I have met dozens of people who have been affected. I think of Willie Riggins, Bill Adams and Bob Duncanpeople who worked all their lives and whose pension was taken away through no fault of their own. Members on both sides of the House have experience of that and have great sympathy for people in that situation. That is exactly why, in the Pensions Act 2004, we introduced the financial assistance scheme, and why we put in place the Pension Protection Fund, to ensure that today's workers do not face the same threat again.

Michael Weir: Will the Secretary of State give way?

James Purnell: I am not the Secretary of State, but I am happy to give way.

Michael Weir: ApologiesI am getting ahead of myself. The Minister talks about the financial assistance scheme. Changes are welcome, but many people's schemes have been wound up when the company is not insolvent, and the scheme does nothing to help them. Has he given any consideration to what help, if any, can be given to those people?

James Purnell: I am just getting into my stride, but I will come to that at the end. The issue throughout has been whether we could make a clear difference between companies that were affected before the financial assistance scheme came into place and companies that are still trading today. We would not want to open up a loopholeI am sure that the hon. Gentleman would not want to do sowhereby perfectly healthy companies could dump their scheme on the taxpayer, but I will come to that issue later.
	Given that sympathy, the Government have always sought a satisfactory solution for those who have suffered, but there has always been a debate about the level of that assistance. As the ombudsman herself made clear,
	it was the sole responsibility of Government or that the taxpayer should pick up the tab was not what I said... I did not say, 'Write a blank cheque', but organise a remedy.
	The Government have organised a remedy, but let us be clear about why have we had to do so. As the European Court of Justice found during our proceedings in Committee, the then Tory Government failed to implement the 1980 insolvency directive and to protect people's pensions. As the judicial review found, the 1996 leaflet published by the then Tory Government was misleading and maladministrative. In 1995, when the Labour party in opposition proposed creating a pensions lifeboat, the now shadow Foreign Secretary, then the Pensions Minister, opposed it, and this Labour Government had to introduce the PPF.
	The hon. Member for Runnymede and Weybridge (Mr. Hammond) said during his winding-up speech yesterday that there was no need to introduce a pension lifeboat in 1995. If he and the Conservative party had taken our advice, there would be no need to introduce one now, and we needed to wait for a Labour Government to do so. The Government had previously defended that Tory record, but those court cases have made it clear that those actions were wrong, and we have therefore reconsidered the level of the financial assistance scheme.
	By contrast, the Conservative Front Benchers have always resisted putting more taxpayers' money into FAS. The hon. Member for Eastbourne (Mr. Waterson) said in the House that
	at no stage have the official Opposition ever committed taxpayers' money to this issue above and beyond what the Government have already committed.[ Official Report, 27 June 2006; Vol. 448, c. 175.]
	We look forward to finding out whether they will support the money that we are putting in, but there is a very clear difference for people between the Conservative amendments, which would try to find money by taking it from one set of pensioners and giving it to another, and our amendments, which will guarantee money from the taxpayer to get to at least 80 per cent. of people.

Philip Hammond: Perhaps I should just make it clear to the House that Conservative Members will support new clause 38, and that our amendments are not an alternative to that new clause; they assume the acceptance of new clause 38, which will essentially implement the commitments that the Chancellor and the Secretary of State for Work and Pensions made at Budget time and build upon them.

James Purnell: We will be grateful for that support, but the House will notice a pattern in Conservative policy making: not to make any policy, and when we come up with a policy, to back it. The Conservatives said that they would not put in any more taxpayers' money; now that we have done so, they are saying that they want to. The problem with the hon. Gentleman's policy is that, even before it has been debated in the House, the Association of British Insurers has been condemning it as another raid on pension funds. So the Tory party was yesterday complaining about a raid on pension funds, and today it is having a row with the ABI about one that it is proposing. The Conservatives need to decide which way they are facing.

David Laws: Is there not a pattern in Government policy making as well: three times, the Government have been dragged perhaps not kicking and scheming, but kicking and screaming into providing some pension compensation, first with the financial assistance scheme and then with two increases in its size? Given the amount that is now being put in and the feeling of concern and injustice, why on earth cannot the Government go the final step today to deliver what most hon. Members on both sides of the House want: fair compensation at PPF level, with the other changes that are in the cross-party amendments?

James Purnell: Again, I will turn to that in my speech slightly later on, but I want to contest what the hon. Gentleman has just said. We could have just looked at the outcome of those court cases and continued to defend them. That would have benefited only a very small number of people. The ECJ made it very clear that it thought that damages would not be payable, so the case would have affected only people who went into insolvency after the case. Similarly, the judicial review only asked us to reconsider the decision. Given that the courts had made it clear that the Conservative Government's decisions that we have defended had been wrong, we decided that it was time to come up with a scheme that would provide at least 80 per cent. and to listen to the suggestions that the hon. Gentleman, other Opposition Front Benchers, the ombudsman and my honourable colleagues have been making and set up a review. That is the right way to proceed, but I will turn to his precise point later in my speech.

Philip Hammond: The Minister again mentions the review. It is important that we clarify the situation because hon. Members will have heard the Prime Minister talking about the review. The Minister has carefully talked about the review considering pooling assets, but the Prime Minister said that it will consider the use of unclaimed assets. Will the Minister confirm that the Prime Minister made a mistake?

James Purnell: No, the Prime Minister did not make a mistake. The hon. Gentleman knows very well the terms of reference, which say that we will consider all suggestions that people put forwardwe look forward to his submission. All that we are saying is that this needs to be based on proper work by experts, rather than amendments that, with great respect, the hon. Gentleman does not know are workable.

Frank Field: May I take the Minister back to what the ABI said? If it was saying that Members on either side of the House wanted to transfer the unclaimed assets of pensioners, they could not have misunderstood the position more severely. We have been saying that we should use the unclaimed assets of banks and building societies, which are separate from any unclaimed assets of pensioners and from unclaimed moneys that insurance companies hold that have clear ownerseither policyholders or shareholders.

James Purnell: We will be happy to read any submission that my right hon. Friend makes to the review. However, this debate shows exactly the need for that review. Rather than accepting amendments that people do not know are workable, it is right to hold a review involving experts, such as lawyers, people from the insurance industry and scheme administrators, who can come forward with proposals that will be workable and properly thought through.

Mark Pritchard: Given that Conservative Members are happy to support Government new clause 38, are there any Conservative new clauses before the House today that Labour Members would accept equally graciously?

James Purnell: The right thing to do is to look at the outcome of the review.

Mark Pritchard: The logic of what the Minister says is that he is happy to accept only Government new clauses ahead of the review and that any new clauses that we have tabled cannot be accepted until after the review.

James Purnell: The problem with the Conservative amendments is that they could expose the Government to compensation if annuity rates were to fall. They could expose the Government to moral hazard if people started to manipulate the rules. They could also expose the Government to legal challenge, including in the European Court of Justice. The last thing that the House should do is to raise pensioners' expectations on the basis of amendments that have been hastily drawn up for this debate. Instead, we should have a proper review.

Clive Betts: I want to return to an issue that was raised before. I know that the Minister said that he would address it later in his speech, but I hope that this is the right time to make this point. I have visited him with pensioners from my constituency who worked for the firm Tinsley Bridge, which is still in existence. Given that the firm is not in liquidation, its workers cannot at present be covered by the financial assistance scheme. However, the firm is not in liquidation only because the pension scheme decided not to pursue from the company the full amount due to it. The pension scheme has thus been wound up, so the workers in the scheme cannot join the PPF. The company's pensioners and future pensioners are thus caught in a situation in which they cannot be part of the PPF or receive any help from the FAS. About 8,000 people in the country are affected in such a way. Can my hon. Friend give us any assurance that those workers will now be included in the FAS?

James Purnell: I was going to come on to this point later, but I will deal with it now because I have been asked about it twice. My hon. Friend has campaigned on the matter long and persuasively and brought a delegation to see me. The Public Administration Committee has raised the matter, too. We have always been clear that we wanted to ensure that we did not create a loophole, as I said to the hon. Member for Angus (Mr. Weir).
	I am delighted to be able to tell my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) that we can announce today that we will further extend the FAS to cover members of schemes that began winding up between 1 January 1997 and 5 April 2005I believe that that covers the Tinsley Bridge schemewhen a compromise agreement is in place and when enforcing the debt against the employer would have forced the employer into insolvency. We estimate that that will benefit an additional 8,000 members of some 15 schemes.

Clive Betts: May I put on record my thanks and those of my constituents, the workers at Tinsley Bridge and those at all the other firms? A lot of people woke up this morning worrying about their future because they thought that their pensions would be either non-existent, or greatly reduced. My hon. Friend's statement has certainly given those people a lot of cause for cheer.

James Purnell: I thank my hon. Friend for his comments. I hope that hon. Members will thus think that it would be inappropriate to press new clauses 25 and 40 to a Division. Those measures would bring into the FAS any failed scheme, regardless of the solvency position of the employer.

Tony Wright: rose

William Cash: Will the Minister give way?

James Purnell: Does the hon. Member for Stone (Mr. Cash) wish to intervene on this point?

William Cash: The Minister has met

Mr. Deputy Speaker: Order. We cannot have the Minister partially giving way. I think that he has allowed the hon. Member for Stone (Mr. Cash) to intervene.

William Cash: The Minister was good enough to meet Mr. Richard Nicholl and me to discuss amendments that are adequately covered by the excellent new clause 25, which was tabled by the hon. Member for Cannock Chase (Dr. Wright), who also wishes to intervene at this stage. Would the Minister be good enough to confirm that the arrangements proposed in new clause 25 would come into effect under the proposals that he has announced in response to the questions raised by the hon. Member for Sheffield, Attercliffe (Mr. Betts)?

James Purnell: I will have to write to the hon. Gentleman to set out the situation for the precise scheme to which he refers. We are trying to create a separation between schemes that decided to put in place a compromise agreement before the introduction of the FAS and schemes that did not do so. The danger of creating a procedure as set out in new clause 25 is that perfectly viable companies could dump their pension commitments on the taxpayer, which would not be right.

Tony Wright: I am pleased by what my hon. Friend has said, but I do not understand the basis on which he argues that he therefore could not accept new clause 25. The new clause refers explicitly to schemes that are eligible for assistance under section 286 of the Pensions Act 2004. That measure specifies that its provisions apply only to schemes that were in the process of winding up before the specified date on which schemes became eligible for the PPF. His argument that the new clause would open the door to problems thus simply cannot be true.

James Purnell: I am advised that new clause 25 would open the door to a wider range of schemes. When people talk about solvent employers, I believe that they are talking about the category that we have identified today. We have no intention of doing anything other than delivering for those schemes. I hope that my hon. Friend will be reassured by what I have said. If he makes a speech, I will try to intervene on him to confirm the exact situation.

Several hon. Members: rose

James Purnell: I think that I should make some progress because we have been debating the group for 15 minutes.
	I am delighted that the Government have committed more money, as the Chancellor announced in the Budget on 21 March. The scheme was going to benefit 45,000 people; now it will benefit all 125,000 affected, in addition to members of the solvent schemes that I have just mentioned. The scheme was going to benefit people up to 12,000 per year, but it will now benefit people up to 26,000 a year. It was going to taper down to 50 per cent. and then to nothing for people who were not covered. Now it will be at 80 per cent. for everyone, and an extra 100,000 people will get more benefit. In all, we are allocating a further 5.6 billion in cash terms. The original amount committed to the FAS in 2004 was 400 million in cash. We then extended that figure to 2.3 billion. With this further extension, we have reached 8 billion in cash, or 1.9 billon in net present value. That represents a significant commitment to helping the people whom we are aiming to address through our measure, which I hope that the House will welcome.

Alan Simpson: I appreciate the Minister's clarification about the increase in overall funds. However, the last figures on payouts from the FAS that I received suggested that the amounts were not in the region of billions. So far, 12 million has been allocated to 1,000 of the 10,000 eligible pensioners. Of that 12 million, 4 million has gone to the pensioners, while 8 million has been spent on administration. Can the Minister give us any indication of how we can address this incredible delay during which the vast majority of pensioners have received nothing?

James Purnell: I am afraid that there is a misunderstanding about the task that the financial assistance scheme has had to undertake, which the PPF or whoever else was tasked with running it would have had to undertake. The FAS has had to go through hundreds of schemes to see whether they are eligible; it has had to set up a new IT system; and it has had to get data from the trustees about exactly what people are entitled to and compare that with FAS. That is why there has been a significant up-front cost. That work is now largely complete, and we are paying everybody whom we are in a position to pay. Everybody who has asked for initial payments is being paid. There is no delay in FAS; the delay is in requests for initial payments. We need schemes to come forward and ask for those. I will return to that matter later in my speech.

Philip Hammond: Because people outside may not understand what the Minister has just said, will he clarify that he is talking about the trustees having asked for payments to be made? This is not a question of individual potential recipients having failed to ask for payments.

James Purnell: That is absolutely right; it is the trustees who we are encouraging to ask for payments. I have written to a number of them, which has helped in certain cases. I encourage all Members of the House who are aware of schemes in which there are delays to contact the trustees. Some are very good and some have been too slow. The right way to seek to get more money for people is to encourage the trustees to apply for initial payments.
	I want to pay tribute to Community and Amicus for their tireless work at the forefront of the campaign on this issue. They have been joined in that by many Members in the House, including my hon. Friends the Members for Aberdeen, South (Miss Begg), for Ayr, Carrick and Cumnock (Sandra Osborne), for Jarrow (Mr. Hepburn), for Cardiff, North (Julie Morgan), for Sittingbourne and Sheppey (Derek Wyatt), for Aberavon (Dr. Francis), for St. Helens, North (Mr. Watts) and for Vale of Glamorgan (John Smith), and my right hon. Friends the Members for Cardiff, South and Penarth (Alun Michael) and for Islwyn (Mr. Touhig). That list shows the strength of feeling in the House about this policy. We believe that 80 per cent. of the funding is the right amount for the public purse to bear.
	New clauses 24, 26 and 27 all call for the taxpayer to fund FAS assistance at the same level as the pension protection fund, which would essentially be 90 per cent. with some limited indexation. What is the Tory position on the new clauses? We look forward to finding out later. We have a clue, however. The hon. Member for Runnymede and Weybridge has obviously been pestering the shadow Chancellor for more money. We had evidence of that in yesterday's debate, when it emerged that the shadow Chancellor had said that
	there are lots of Conservatives who come up to me and say we've really got to put more money into pensions.
	Presumably, he was referring to his Front-Bench colleagues. Unfortunately, the hon. Member for Runnymede and Weybridge has been slightly disappointed because the shadow Chancellor is obviously feeling under such pressure that he had to say publicly, at the Conservative party conference, that
	part of the test of whether we are ready for government is whether we can resist those additional draws on public expenditure.
	If the Conservatives vote for these new clauses, they will be failing that test. They will be making an unfunded commitment to an additional 2.7 billion. If they vote for the new clauses, they will be tearing another hole in their already tattered reputation for fiscal discipline.
	Let me be clear: the Conservatives' proposal for a lifeboat fund is just another uncosted policy. They propose to make a loan from the Treasury. What is a loan from the Treasury other than public expenditure? It is a bit like going to a bank and saying, Give me a mortgage. I am going to find someone round the corner to pay it back. It is a public spending commitment, and if the Conservatives vote for it that is exactly what they will be making.  [Interruption.] Oh, it is a costed public spending commitmentcosted, but not funded. That is the problem with the Conservatives' policy. They make commitments, but they have absolutely no idea of how to fund them.

Henry Bellingham: I thank the Minister, who is obviously in a combative mood, for giving way. He implied that our new clauses and amendments were put together on the back of a fag packet over the weekend. Is he not aware that Ros Altmann, the pensions expert who has advised the Government, supports them? She has made it clear that she believes that they are workable and affordable, and that the Government should accept them.

James Purnell: I have great respect for Ros Altmann, but as far as I know she never worked as an adviser to No. 10 or No. 11, as is often said. We are happy to look at her suggestions as well as others made by Conservative Front Benchers. My point is that the Conservatives are starting to emulate the hon. Member for Yeovil (Mr. Laws) in making policy proposals that they have no idea how to fund. No wonder they are reputedly trying to lure him to their Front Bench; they are obviously learning from his example. We believe that there is a better approach.

David Laws: We are very entertained by these parts of the Minister's speech, but before he wraps up his commentswe never know when he is going to sit downwill he explain the point that he left unresolved earlier? What is the difference between the proposal that he makes today, for the first time, to the hon. Member for Sheffield, Attercliffe (Mr. Betts) and that in new clauses 25 and 40? What would be the problem with accepting those new clauses? How many people who would be included in that proposal are left out of the one that he is making? Surely we need to know that before we vote.

James Purnell: Healthy, solvent employers may have wound up their scheme when employer debt was set at the minimum funding requirement. Such employers should have made good their pensions promisethey were funded at the MFRso new clause 25, which would allow those schemes in, is inappropriately wide. That is a consequence of the drafting of the new clause rather than any difference of policy. People were asking for the scheme to cover 6,000 pensioners in solvent companies; we are actually covering 8,000. The House is getting slightly over-excited about a point on which there is not a difference.

Philip Hammond: The Minister has given a very technical answer to the question asked by the hon. Member for Yeovil (Mr. Laws). How many additional scheme members would get through the gateway if new clause 25, rather than the Minister's proposals, were accepted?

James Purnell: The whole point is that people do not know[Hon. Members: Ah!] We can quantify the people who have compromise agreements because we know exactly who they are. They are people for whom the ombudsman and Members of the House have been campaigning. We have done exactly what people have asked us to.

Tony Wright: This is important so we must be clear about it. Is the Minister saying that he accepts the substance of new clause 25, reflecting the announcement that he has made this afternoon, but he thinks that it is technically deficientalthough I am advised that that is not the caseso he will incorporate it in the Bill at a later stage, to remedy its technical deficiency?

James Purnell: I am saying that we have the same intention and that we will make proposals to make sure that what we have said is exactly what happens. I am happy to meet my hon. Friend to discuss the matter, but I am pretty sure that he will be happy with what we have done because our intention is the same.
	We believe that 80 per cent. is the right amount from the taxpayer, but we are not saying that that is all that should be considered. The taxpayer should fund up to 80 per cent. but there should then be a review of alternative sources of funding that have been suggested. The taxpayer does not fund the 90 per cent. level provided by the PPF. There is no taxpayer money at all in the PPF. There will now be nearly 2 billion of taxpayers' money in net present value terms in FAS. In contrast, the PPF is funded entirely by the levy payments of member companies, which are paying to insure themselves against future possible insolvency. We therefore think that the balance that we are striking of nearly 2 billion of public money in FAS and no public money in the PPF, with a review to look at what more could be done, is the right one for the taxpayer and for the people involved.

David Laws: Can the Minister tell the House what would be the additional net present value cost of granting the PPF level of benefits after the offsets for tax and lower means-tested benefit payments?

James Purnell: Yes, if the hon. Gentleman can tell me what tax and benefit policy will be for the next 50 years. So far there is very little interaction between FAS payments and pension credits. Very few of the current recipients get pension credits, so that will not reduce the cost significantly. The difference for the payments that I set out earlier is the additional 2.7 billion, which in net present value terms is about 600 million, or an increase of a third in the current scheme.

Frank Field: The Minister has talked about an additional 2 billion going into the fund. Where is that money? I cannot find it anywhere in the Department's accounts. Has anyone received it? Is it a fund with pension trustees who are accountable for its expenditure or is it something that maybe, at some stage, a Government will pay?

James Purnell: That is a very good point. There is a misunderstanding about this. People think that the sum is a pot of money that has been put into the scheme; it is not. It is a guarantee from the Government to pay at least 80 per cent. We have estimates of how much that will cost, but it could cost more than 8 billionfor example, if people in the schemes live longer. However, the Government are giving that guarantee, which is not available elsewhere, so it is significantly worth while to the people involved.
	The right thing to do is to carry out a further review. We are doing precisely what is suggested in new clause 11 and holding a review, which will be led by Andrew Young, directing actuary at the Government Actuary's Department, who helped to set up the PPF and who therefore has real expertise in this area. He will be advised by a panel of leading external experts. The review will provide an initial view in the summer and will then report by the end of the year. I can make it clear today that any extra funding that the review identifies will be put into topping up the financial assistance scheme beyond 80 per cent.
	The review will be able to consider the suggestions made by the Opposition today. However, I say with all due respect that the Opposition have no idea whether the amendments that they have tabled would work. As I said before, if we compelled people to stop annuitising and they lost out, we could be open to compensation claims, and if annuity rates fell, we could be open to compensation claims. The Opposition have no idea whether their amendments would override scheme rules. The amendments cannot be guaranteed to work, so it would not be appropriate to move forward without the proper review.
	Counter-intuitively, the Tories like picking rows with business these days, but in a pretty spectacular example, the Association of British Insurers has come outeven before the amendments are debatedand described the Opposition proposals as
	robbing Peter to pay Paul
	and another raid on pension funds.

Philip Hammond: rose

James Purnell: I see that the hon. Gentleman wants to continue his row with the ABI and get himself into even deeper trouble.

Philip Hammond: I have had a discussion with the ABI this morning to find out what its concern is, and I have been able to allay that concern, which was about trust-based defined benefit schemes. We recognise that there are no unclaimed assets available in such schemes.

James Purnell: The hon. Gentleman has just shown again why we cannot accept the amendments. He has no idea what they are about and people outside are confused. Every time he intervenes, the policy changes. That is precisely why we need to have a proper review by experts before deciding what to do.

Philip Hammond: If the Minister wants to talk about the new clauses, he should read them. They give the Secretary of State the power to specify the classes of unclaimed assets; they say nothing about the specific classes involved. The hon. Gentleman simply cannot say that we do not know what we are talking about.

James Purnell: The hon. Gentleman has contradicted the answer that he just gave. He said that the amendments were about only one class of assets, but now says that they can be about any class of assets. Today, he has shown why what we should be doing is waiting for pensions experts to complete their review, rather than accepting his amendments.
	Our key concern should be getting as much money as possible to people. In Prime Minister's questions, the Leader of the Opposition said that we should be doing more for people who are retired today, and we agree entirely. That is why the Government amendment will increase the amount that people get in initial payments from 60 per cent. to 80 per cent. That means more money for more people immediately.
	That brings me to new clause 47, whose purposes appear to be twofold: first, to transfer the delivery of the financial assistance scheme to pension schemes; and, secondly, to provide that funds for those payments should be provided by FAS or by the lifeboat, whether by loan or by retrospective repayment. The problem with the new clause is that scheme administrators, who are expert in what they do, would have to learn a new set of skills that FAS is currently delivering. We would be ignoring the expertise that exists in FASa single centralised unit, which has assessed hundreds of schemesand instead asking hundreds of scheme administrators to learn those skills. Those scheme administrators would then come to us saying that they should be paid for having done so.
	Instead of increasing the cost to pension schemes, thus depleting the amount available to members, and slowing the process of making payments to people, we should be working with scheme administrators so that they provide the information that we need to make initial payments to people which, as I have just announced, will increase from 60 per cent. to 80 per cent. Government new clause 38 is the only amendment that will enable us to give more people more money immediately, and I urge hon. Members to support it.

Michael Penning: The Minister is being extremely generous in giving way. If scheme administrators are happy to take on the rolethey cannot do worse than the FAS, which has spent 9 million administering 3 million paid to pensionersit is logical to let them get on with it. If they want it, let them do it; they cannot do worse than the existing scheme.

James Purnell: They do not want it. I have spoken to them and they do not want it. They are already incredibly busy winding up schemes. If the Opposition's new clause was accepted, they would have to learn a new set of skills. The priority is to get them to apply for initial payments and to wind up their schemes as quickly as possible. Loading the operation of a Government scheme on them would risk delaying the payments and increasing the costs.

Michael Penning: It would not delay them more.

James Purnell: It would cause further delay. The expertise exists and the schemes have been assessed. The skills necessary to assess how much people should get from FAS would have to be learned by scheme administrators.

Michael Penning: Is the Minister honestly telling the House and all those pensioners here today for the debate that spending 9 million to give 3 million to pensioners is a great success?

James Purnell: The hon. Gentleman obviously did not listen to my speech. At the start of the PPF process, the scheme and what is owed has to be assessed; thereafter, the process of paying people is quite easy. FAS has made good progress in doing that and we are now in a position to pay people when they apply for initial payments. That is what needs to happen.
	The Government amendment will guarantee that FAS members will get at least 80 per cent. of their core pension, but through the review we are making a firm commitment to consider other sources of funding. We understand the aspiration of Community and Amicus to achieve PPF-level pensions for their members, but there is still no certainty about the funds available in the failed pension schemes, and until the review is completed it is not possible to give a guarantee, which is what the Tory Front Bench team is trying to do. However, we will consult Community and Amicus throughout the process to ensure that the funds that are available are applied to supplementing FAS to get nearer to 90 per cent. The review will report publicly the initial recommendations by the summer and a series of consultations with Community and Amicus and related organisations will begin immediately.

David Laws: The Minister mentions the unions' aspiration, but is he saying that although the Government's aspiration is to deliver PPF levels of benefit, the Government's position is that pensioners who have lost their pension should take the risk in the mean time that the Government are not successful in delivering the necessary money?

James Purnell: I am saying that it would be deeply irresponsible to do as the Opposition are doing, which is promising to deliver more money on the basis of a scheme that they do not know will work and without a proper review. The right thing to do is for the Government to pay at least 80 per cent. and we have now provided 8 billion. The Conservatives said that they would never put in more taxpayers' money, but we have now done so. I urge my colleagues to support the Government amendments.

Philip Hammond: The background to this matter is well known and well rehearsed. We are dealing with a finite groupfuture pension scheme failures will not increase its sizecomprising 125,000 people, some of whom are terminally ill and some of whom have had to come out of retirement and start work again. There are some heartbreaking stories, and I am sure that hon. Members on both sides of the House will relate some of those stories during the debate. Fairness demands that the people in that group are treated similarly to those whose schemes failed after April 2005, whether their employers were solvent or not. Fairness is not alone: the ombudsman, the Public Administration Committee, the European Court of Justice and the High Court have all expressed the same sentiment.
	It is fair to say that a consensus has emerged both within the House and among the pressure groups outside that a settlement around PPF levels of benefits, although it is less than some people hoped for, would be a fair and reasonable outcome. However, the Government are still appealing the ombudsman report and resisting the finding of maladministration. I repeat what I have said several times before: there will not be a legal solution to the problem; there will have to be a political solution. There is a huge amount of good will on both sides of the House when it comes to trying to solve the problem.
	As the Minister said, the Government have promised a review to consider the use of scheme assets, and we welcome that, but the review must not stand in the way of the search for an immediate solution. Our proposal will provide that immediate solution, while accommodating the review that the Government have announced, and the additional assets that may come out of that review. I pay tribute to the Select Committee on Public Administration and the hon. Member for Cannock Chase (Dr. Wright) for their work, which has been instrumental in trying to craft a consensual solution that would command support and respect in all parts of the House. There are a lot of people watching us today; Parliament is on trial, and people want and expect us to work together to find a compromise solution that will deliver a fair, sustainable and effective outcome, and to set aside party political considerations.

James Plaskitt: That's what you were doing yesterday, was it?

Philip Hammond: I am glad that the Under-Secretary of State mentioned yesterday, because, to turn to Government new clause 38, I have to say that I am a little disappointed by the speech that the Minister for Pensions Reform just made; he seemed to think that he was arguing in yesterday's debate. The tone today is not partisan. Today, I hope, is about the search for consensus on a solution. As the Minister said, new clause 38 responds to the Budget announcements that the Chancellor and the Secretary of State for Work and Pensions made. It improves the scheme significantly for younger members who would otherwise have been excluded, but it does not address the real issues to do with speed of payment, the effectiveness of the financial assistance scheme, and the benefit payable. The increase in the cap will benefit some higher-paid scheme members, but that does not address the issues affecting the desperate people whom the Members most interested in the subject meet repeatedly. We will not oppose new clause 38, because it is a significant improvement and a helpful step forward, but it does not address the real issues before the House today.
	Amendment (a), which the hon. Member for Cardiff, North (Julie Morgan) tabled, would amend Government new clause 38 by increasing the benefits provided in the new clause to Pension Protection Fund levels. It is similar in its effect to new clause 24. We have two concerns with amendment (a). First, because of the reference to qualifying members, it appears to include only those members who are over 65, rather than those who are over scheme retirement age, as the PPF does, yet that group includes some of the people in greatest hardship. Secondly, we believe that, contrary to what the Minister said, it is necessary to balance the moral case for helping that group of people with the obligation on us all to protect the taxpayer. I shall outline how we think that our proposals to use unclaimed assets, backed up by a Government loan, get that balance right.
	The amendment tabled by the hon. Lady and new clause 24 simply transfer the problem to the taxpayer. We accept that, as the Minister pointed out, if a loan is made, a residual contingent liability is taken on, but if we are to reach a solution to the problems, we have to recognise that we are all in this together. There has to be a sharing of the pain. The pensioners concerned have to accept that they will receive only 90 per cent. of the benefits that they would have got, the industry has to accept that it will have to yield up the unclaimed assets, and the Government have to extend the loan to bridge the gap, so that relief can be provided right now, while the unclaimed assets are being collected. I have set out the two reasons why we cannot support amendment (a), tabled by the hon. Lady; we urge her to consider supporting new clauses 41 to 45 instead, which have the same objective and would deliver the same outcome for pensioners, but which take a different route.

Adrian Bailey: I have listened to the hon. Gentleman's arguments carefully, and to his declared intention of trying to develop a consensual approach. Given the amendments and the solution that he has put forward, would it not be more appropriate to wait until after the review, proposed by the Government, has taken place, so that we can see whether that solution is the most appropriate, and whether the Government address the issues that he says need to be addressed?

Philip Hammond: This is the day when Parliament has the opportunity to demonstrate that it is committed to solving the problem, not committed to another review of the problem. I say to the hon. Gentleman that the scheme that we have set out, involving a lifeboat fund, in no way precludes using the assets that the Minister hopes to find in his review, including, possibly, the residual assets in the schemes; those could go into the lifeboat fund. The difference between the Government's approach and the approach that we are setting out in this group of amendments is that we are proposing to create that structure immediately, and by the means of a modest loan, we would be able to start delivering immediately to a group of people who need help now, not at some point in the future.

James Purnell: In yesterday's debate, the hon. Member for Tatton (Mr. Osborne)he is sitting right next to the hon. Member for Runnymede and Weybridge (Mr. Hammond), so he can consult the shadow Chancellor right nowsaid that the test of the Conservatives' credibility was whether they could resist making such pledges on pensions. The hon. Member for Runnymede and Weybridge is pledging to increase public borrowing by 600 million to fund his proposal, but he has no idea how to fund that. Will he tell us what else he is cutting, given that the Conservatives' third fiscal rule means reducing the proportion of public spending in gross domestic product? How will he fund the proposal?

Philip Hammond: The Minister is absolutely wrong. He knows as well as everyone else in the House that unclaimed assets are available. The Government used to claim that unclaimed assets did not exist, but they have now discovered them, and the Chancellor has started looking at them for various purposes. What we have said is that the Government should make a loan available to the lifeboat fund to enable it to start paying out immediately. The process of collecting unclaimed assets, which would enable that loan to be repaid, would then begin. It is ridiculous for the Minister to suggest that the loan would need to be 600 million; he has just explained, in the context of the financial assistance scheme, that the scheme would not have to be pre-funded. It can be a pay-as-you-go scheme.

Frank Field: Would the Opposition spokesman like to remind the House that as part of the recovery plan for the pensioners who had their pensions stolen by Maxwell, the Government offered a loan to the funds? That loan is still being repaid, and some of us are under pressure from pensioners who believe that the repayment should not continue, but that the moneys should be paid into their funds instead, so that they can enhance their pensions. The money was a loan; the House agreed it as a loan, and repayments have been made and continue to be made.

Philip Hammond: As the right hon. Gentleman says, and as my right hon. Friend the Leader of the Opposition said at Prime Minister's questions today, the Maxwell loan is the model on which we based our proposal.

James Purnell: No one is disagreeing that it would be possible for the Treasury to make a loan. All that we are saying is that the Opposition have no idea where the money will come from. They have just proposed, yet again, an unfunded Government policy. They are proposing to increase the public sector borrowing requirement, and the hon. Gentleman's only answer to my question is, We'd get the money from unclaimed pension assets. If he is to increase public borrowing, he has to tell us what else he would cut, but I bet the House that he will refuse to do so.

Philip Hammond: The amount of money that we are talking about is around 30 million a year in the early years, and I hope that the Minister agrees with those approximate figures. He talks about unfunded commitments, but he has just made an increase in the commitment to the financial assistance scheme from 2.4 billion to 8 billion. That money will be spread over 50 or 60 years, and the money needed for the lifeboat fund will also be spread over 50 to 60 years. The initial cost will be approximately 30 million in the first year, and that will be funded by a Treasury loan of 30 million, which is way below the rounding error in any of the accounts that his Department produces.

Henry Bellingham: My hon. Friend has a point about the 30 million. A few weeks ago, he went on the green to meet some former Albert Fisher employees, who lost a huge amount, and he was very sympathetic to their plight. They want the speed of payment and the level of benefits to be looked at, and they cannot wait for another review. We have an opportunity this afternoon to solve their problems, so it is incumbent on all Members to support the amendments that would allow that to happen.

Philip Hammond: My hon. Friend has got it exactly right. The Government have announced a review in an attempt to head off a Labour Back-Bench rebellion. What the public expect from us today is a solution to the problem, not a further review.

Michael Penning: My hon. Friend is very generous in giving way. The reason that this is so urgentthe Minister will remember that he met the widows of members of the Dexion scheme and other pension schemes who lost their husbands since the schemes collapsedis that those people are in the lobbies today. They need help today, not after a review, and they should not be fobbed off yet again.

Philip Hammond: My hon. Friend is absolutely right. I repeat that there is nothing incompatible between our proposal and what the Minister hopes to be able to do in future. The only difference is that we believe that the House has a moral obligation to act now. If that requires a Treasury loan, we are prepared to make that commitment. That is the minimum that people listening to the debate would expect a responsible and moral Government or Opposition to be prepared to do.

Julie Kirkbride: It strikes me that the Government Benches are grasping at straws to try to claim the credit for a policy that they will announce in the summer but which is ours today. Representing many of the people affected by the collapse of schemes, I find that disappointing. In trying to denigrate our claims of financial prudence, the Minister said that he does not know whether his 8 billion forecast is accurate. Would it not be fair to say that if there were more unclaimed assets than he expects, we could save the taxpayer money so we might not have to finance 80 per cent. of the FAS commitment? There might be more money in unclaimed assets, thus saving the Treasury money for my hon. Friend the Member for Tatton (Mr. Osborne).

Philip Hammond: My hon. Friend makes a very good point, but she should be careful. Her criticism should not be aimed at the Government Benches, where there are plenty of Members who have entered into this discussion in a spirit of good will and are trying to find a solution. Those on the Government Front Bench should bear the brunt of her comments.

Several hon. Members: rose

Philip Hammond: May I make some progress and turn to new clause 25 and the Minister's welcome announcement that he is willing to yield on the issue of solvent schemes? There appears to be a technical issue concerning the extent of his commitment. Yesterday, the Chancellor displayed alarming unawareness of the problem of solvent schemes, and told the House that the problem for those pensioners was that their employers had gone bust. Hon. Members who take an interest in these things know that in some cases that is not so. The problem is that the schemes are underfunded, not that the employer has gone bust.
	That is an issue that the hon. Member for Cannock Chase (Dr. Wright) must address in his contribution. He must decide whether his new clause 25 needs to be pressed further, notwithstanding the commitment that the Minister made today. I came to the Chamber ready to commit the Opposition to supporting the hon. Gentleman and his new clause, which extends the scheme to solvent employers.  [ Interruption. ] The Minister is asking where the money will come from. It will now come from the Government's pot, because he has made a commitment. The hon. Member for Cannock Chase will make a judgment as to whether to proceed with new clause 25. He has taken a great deal of care and consulted experts on the issue, and I certainly await what he says with great interest.

William Cash: I am encouraged by what my hon. Friend has said. I was encouraged, too, by what the Minister said when, in reply to the hon. Member for Cannock Chase (Dr. Wright), and with reference to my constituent Mr. Nicholl and others, he said that the hon. Gentleman would be very happy with the outcome. That is highly significant. Although we will vote on the issue today, there is still an opportunity to get the wording into the exact shape needed to satisfy all parties in the House of Lords. There is therefore plenty of room and time to get this right while taking the consensual approach that my hon. Friend has quite rightly emphasised.

Philip Hammond: I am grateful to my hon. Friend for his intervention. The Minister, in a rather niggardly way, criticised the drafting of the amendments at the Dispatch Box. We all recognise, whether we are Opposition spokesmen or Back-Bench Members, that when we table amendments and new clauses we are asking the Government to look at their spirit. I am sure that no one who tabled a new clause today would fail to hesitate to press it if the Minister made a commitment to deal with the substantive issues that they raise when the Bill proceeds to the House of Lords.
	Our new clause 40 approaches the problem from a slightly different angle from new clause 25. On reflection, we have decided that new clause 25 provides the better approach so, if the hon. Member for Cannock Chase chooses to proceed with it, we will support it. New clause 26, which was tabled by the hon. Gentleman and members of Select Committee on Public Administration, does not suffer from the defects of new clause 24, as it clearly includes people under 65 who are none the less over scheme age. It still makes a public spending commitment. I should have made it clear earlier that one of our concerns about amendment (a) to Government new clause 38 is that it appears to exclude members who are under 65 but above scheme age.
	In new clause 26, however, there is a further problem that I wish to draw to the attention of the House. Subsection (3) requires the omission of the provisions of section 286 of the Pensions Act 2004 that prevent the means-testing of FAS benefits. If the new clause were accepted, it would allow the Secretary of State to impose means-testing on FAS benefits. By seeking specifically to omit the provisions that prevent means-testing, the implication is clearly that FAS benefits should be means-tested. I do not believe that that is the consensual view in the House, and for that reason, and because of the public spending commitment that it implies, we do not support it. New clause 27, which was tabled by the hon. Member for Yeovil (Mr. Laws), excludes the means-testing problems, but it still makes a direct public spending commitment.
	Since the new clauses were tabled, there have been intense discussions in all parts of the House, co-ordinated by the pensions action group, which represents the people who are outside the House today. There is genuine good will to try to seek a solution. I do not think that anyone, except for the Minister, is trying to score political points. We seek a way forward that is fair and deliverable. I pay tribute to Members from all parts of the House, to the pensions action group, and to the tireless Ros Altmannher mobile phone bill, I am sure that many hon. Members agree, must be horrendouswho have done so much to bring the issue to the attention of the House and to focus our attention on the way forward. As a result of that process, a series of new clauses has been agreed by the pensions action group and by Members from all parts of the House as the best way forward, and I thank all hon. Members who have been involved. The amendments belong to the whole House.

Michael Penning: Will my hon. Friend pay tribute, too, to my constituent, Mr. Peter Humphreys, a leading member of the pensions action group who is critically ill in intensive care? When I spoke to him yesterday, all that he wanted was for the consensus to move on so that he can stop worrying about it and get on with getting better.

Philip Hammond: Of course, I join my hon. Friend in those sentiments, and I know that everybody in the House would send Mr. Humphreys their best wishes.
	The new clauses have been tabled in the name of my right hon. Friend the Leader of the Opposition, who has taken a particular interest in this, not least because he has a special constituency interest in a particularly heartbreaking case. They are supported by the leader of the Liberal Democrat party, by the right hon. Member for Birkenhead (Mr. Field), and by other Labour Members who have seen the need for a cross-party solution. I hope that that cross-party approach sends a message to the Government about the strength of feeling and sense of moral obligation across the House. This is one of those occasions when we as parliamentarians have to stand up and be counted and be seen to be doing the right thing.
	Before I go through the new clauses, there is a procedural issue that I should like to explain to hon. Members. I understand that for reasons of time it is unlikely that it will be possible to vote on more than one new clause in the group. I should like to indicate to you now, Mr. Deputy Speaker, that I will, if possible, seek a Division on new clause 41. It is our understanding, on advice, that new clauses 42, 43, 44, 45 and 47 are essentially consequential, and if the House agreed to new clause 41 there would then be an opportunity to consider the other new clauses. That leaves out new clauses 39 and 46, which are not consequential but would do slightly different things. I will deal with those separately.
	I hope that the Government will accept that this is a package and look constructively at its proposals, including the proposal for a moratorium on annuitisation, which, despite the Minister's being so critical, was intended to be helpful and supportive of the review process. There is no point in reviewing the possible use of residual scheme assets if by the time that the review has completed its course and the Minister has considered it the residual scheme assets have all been given to the Pru and Legal and General. That is why we need a moratorium.
	New clause 39 would provide that the PPF board should take over from the Secretary of State the role of scheme manager, for two reasons: on the merits of the case for the PPF board, which has demonstrated its competence by winding up the MG Rover scheme and taking it into the PPF in less than two years; and secondly, as part of a wider architecture in this group of new clauses, which would put the PPF board in overall control board of pension compensationseparate funds, for very good reasons, but under a single administration with single payment structures and, it is to be hoped, administrative savings to be made and efficiencies to be gained. The new clause would achieve its objective simply by substituting the PPF board for the Secretary of State in the 2005 regulations.
	The substantive new clause is new clause 41, which would create the lifeboat fund, also to be placed under PPF management. We need a separate fund, as opposed to one merely incorporated into the FAS. The source of funds for the lifeboat fund would be different from that of the FAS. The FAS is a body publicly funded with taxpayers' money; the lifeboat fund is intended to be funded with unclaimed assets, perhaps with residual scheme assets or some part of them, if they become available, and in the interim to be allowed to go about its work with the benefit of a Treasury loan. The lifeboat fund would be mandated to pay top-up benefits so that people who are being paid under the FAS would be topped up to PPF levels, and people who are below the FAS qualifying age but above the scheme retirement age would be paid from the lifeboat fund. Crucially, it would provide for loans from the Secretary of State to allow immediate operations. Later new clauses would provide for the collection of assets.
	I have acknowledged, and will do so again, that in granting a loan there is a residual risk of a liability to the public purse. However, having considered it carefully and looked at the moral obligation that falls upon us, we think that it is a tiny risk that it is right and reasonable to ask the taxpayer to bear. The costs would be slightly more than the 2 billion in cash over 50 or 60 years, or 600 million net present value, that the parliamentary Labour party briefing document set out, because it appears that the Secretary of State's briefing to the PLP did not factor in the cost of including those who were under 65.
	We estimate that the initial cost of the lifeboat fundits initial cash flow needwould be about 30 million a year, rising to 100 million in 2033 and then tailing off to zero. Today, the Prime Minister quoted a figure of 2.48 billion in cash, or about 750 million NPV, as the total cost of the package of proposals that stand in the name of the Leader of the Opposition. That estimate does not look unreasonable, although we all recognise that in calculating such figures there is a fairly wide degree of error. I should emphasise, however, that the figure would not have to be found immediately but over a period of 50 or 60 yearsexactly the same as the 8 billion that the Secretary of State has committed to the FAS.
	The lifeboat fund would receive unclaimed assets and residual scheme assets if those become available. New clauses 42 to 45 would create the rather inelegantly named pensions unclaimed assets recovery agency. I pay tribute to the right hon. Member for Birkenhead, who will have recognised in the new clauses a large chunk of his private Member's Bill, the Pensions (Unclaimed Assets) Bill. I am grateful to him for doing a large amount of the drafting work. The agency would be charged with first identifying these assets, then collecting and supplying information to the Secretary of State, and then collecting the assets in. The new clause would provide that the Secretary of State specified the classes of unclaimed assets to be collected by the agency. Our focus is on unclaimed pension assets, including the possibility of residual scheme assets. We think that there is an elegance and a justice in using unclaimed pension assets to deal with a pensions problem. However, the House should be aware that the new clause would enable the Secretary of State, over time, should he wish, to widen or change the scope of the classes of unclaimed assets that could be included.
	The Unclaimed Assets Register says that there is about 3 billion in pension sector unclaimed assets. We are rather more cautious. On the basis of private discussions with companies, we think that there may be 600 million to 800 million of readily accessible pension unclaimed assets and a modest flow thereafter. However, Members who have looked into this will be aware of the Irish experience whereby the initial estimates, based largely on information volunteered by the companies holding these assets, turned out to be understated by a factor of 10 or 15-fold.
	Together, the new clauses would create a framework for a fair settlement at PPF levels, with a single payment mechanism based on putting the PPF board in control of the FAS and the lifeboat fund. Although there would be two streams of funding, there would be a single payment mechanism delivering efficiency and seamlessness for recipients. The system would minimise the risk to the public purse, while a loan would allow for an immediate start to payments to those most in need. It would be flexible as to the classes of asset that could be used, so that the Secretary of State would have wide discretion in managing the process in future. It would deliver the objectives of new clauses 26 and 27 and amendment (a) to new clause 38. As far as beneficiaries are concerned, its effect would be no different, but it would be achieved without placing the burden on to the taxpayer.
	New clause 46 proposes a moratorium on annuities. As I have already said, its intention is to support the review that the Government are undertaking. We acknowledge that there are problems with the use of residual scheme assets but our discussions suggest that there is between 1 billion and 2 billion in the schemes that is not already committed to the purchase of annuities, as well as a further sum, which may be subject to some penalty costs when annuity option arrangements have been entered into. That is a sizeable sum. If just part of it could be released to support the lifeboat fund, it would be a useful additional source. That is worth pursuing and we would be happy to engage in the review that the Secretary of State has set up and examine with him some of the problems, which we acknowledge must be overcome to make the proposal work.
	New clause 47 deals with schemes that are still being wound up and places on the trustees a duty to make interim payments. They already have the power to make interim payments if they choose, but trustees, by their nature, tend to be conservative people. Their inclination to ask for interim payments has been disappointing, as the Minister acknowledged. He has written letters to encourage them to do so. We believe that it would be right to impose a duty on them to make such payments, the cost of which they would recover from the FAS and the lifeboat fund in due course when the scheme was wound up. The new clause also provides for the unlikely position whereby a scheme does not have the liquid resources to make payments and Treasury loans might be made to trustees to bridge the gap while they get their assets into liquid form.
	There is a consensus across the House and with outside bodies that represent the victims of the crisis that new clauses 25which incorporates what the Minister told us about solvent schemesand 41 are the way forward. The House today has it in its power to resolve the problem and bring to an end a blot on the reputation not only of Governments but of Parliament. We could deal with the issue now. The overwhelming majority of the victims will accept PPF level benefits as a fair compromise. Parliament, as well as the Government, has been damaged by the continuing disaster. Parliament at least now has the opportunity to set party politics aside and do the right thing. I urge hon. Members of all parties to support new clauses 25 and 41.

Julie Morgan: I thank you, Mr. Deputy Speaker, for calling me to speak about amendment (a) to new clause 38, and new clause 24. I am also a signatory to new clauses 25 and 26.
	The debate is important to the 125,000 people who have been affected by the collapse of their pension schemes. The experience of my constituents who are former employees of Allied Steel and Wire is much in my mind as we debate the subject today. I, along with other hon. Members, have been campaigning for a long time to get justice for the Allied Steel and Wire workers and others throughout the country.
	In Cardiff, 893 employees from Allied Steel and Wire lost their pensions when the private company went bankrupt. All hon. Members have had experience of the utter misery that that caused and its awful effect on families. Many people have come to my surgery and spoken about the personal devastation that was brought upon them. Losing their jobs was one thing and losing their pensions came right on top of it. That was a devastating blow. Many had worked in the steel industry all their livesand we all know that working in that industry is hard.
	Some people have never talked about the trauma of what happened to them. A woman came to my constituency office last week and said that her husband lost his job and his pension and had never spoken of it. The overwhelming horror of what happened to him has meant that he has never been able to talk about it. We are talking about those people's lives today.
	It is important to acknowledge what the Government have done to respond to that devastation in people's lives. The former employees, the unions, especially Community and Amicus, with which I have worked closely, and Members of Parliament, especially, at the beginning, my hon. Friend the Member for Cardiff, West (Kevin Brennan), led a campaign that resulted in setting up the Pension Protection Fund, which will protect pensions in that position from now on. That was a big step forward. I also applaud the Government's establishment of the financial assistance scheme and their work to improve it. When it was originally set up, it applied only to members who had reached retirement age or were within three years of doing so. It was woefully inadequate to address the needs of all the pensioners.
	The pensions White Paper of 2006 extended the scheme to those within 15 years of retirement, with total funding of 2.3 billion, which the new clause increases to 80 per cent. of core benefits. The FAS has been gradually extended, but the process has been long and tortuous. It has taken five years and it has felt as though the campaigning of Members of Parliament, the unions and others forced the Government to improve the provision in the FAS. Nevertheless, they have done that. Many hon. Members, the Community and Amicus unions and I welcome the major step forward that the Government have taken in recognising that the FAS was not adequate to provide a decent income in retirement for the estimated 125,000 people who lost their pensions through no fault of their own.
	The new clause means that all those people will get some help. Some were previously excluded. In my constituency, there are people who had worked for 30 years but, until the new clause is enacted, are eligible for nothing because they started work at an early agesome at 14in the steelworks in Cardiff and were only 54 when they lost their jobs. They were thus not eligible for any of the benefits. Now all of them will get something. That is a big step forward, but we need to go further.
	Amendment (a) has the support of the Community and Amicus unions and I pay tribute to their work. They took the case to the European Court of Justice and have worked tirelessly on the issue. The new clause would ensure that those who lost their pensions before the establishment of the PPF receive the same support as those who benefit it from it in future. Amendment (a) does not prescribe where the funding for the PPF level of benefit should come from. Much discussion has taken place about how the 8 billion over 50 years will work outhow much it will cost and whether it will stretch further than we think. I do not know the answer, but there have been queries about how far the money will go.

Mark Pritchard: Does the hon. Lady share my concern that the review will not report until later this year? There is no immediacy in tackling some of the problems that hon. Members of all parties face in their constituency surgeries week in, week out. Does she also share my concern that there is no obvious legislative time slot to include any outcomes of the review in primary legislation? We could sort the matter out today.

Julie Morgan: I thank the hon. Gentleman for that intervention. I understand from what the Minister said earlier that the initial recommendations will be made by the summer. We certainly want them to be made as soon as possible. We did get a commitment to a time scale from the Minister today, and I welcome that fact that it is to happen by the summer.
	The combination of the extra funds already committed by the Government and the review of how best to use the assets of the schemes in wind-up might be enough to fund an increase up to the PPF level. The Government have not given a commitment to do that, but there is a possibility that it will happen.

David Winnick: I am obviously sympathetic to what my hon. Friend and other colleagues are saying. A constituent of mine who is due to retire shortly came to see me in my surgery. He told me that the Armstrong Pension Group, which was connected with Corus, had collapsed, and that he was going to receive only about 2,500 a year instead of the 10,000 he had expected. He was shattered by that. I took up his case and I am glad to say that he is going to receive more money, through the Pension Protection Fund. I am told that it will be about 80 per cent. of what he was expecting to get. I am very sympathetic to the arguments being put about certain other cases, but we should also pay tribute to the way in which the Pension Protection Fund is helping so many people who would otherwise be living in acute poverty. I also raised this case on the Floor of the House before I received that recent information.

Julie Morgan: I thank my hon. Friend for that contribution.
	I welcome the review announced by the Government today, and I hope that it will produce the results that we need. My concern, however, is that it will not give any certainty. Amendment (a) would ensure that those who currently receive the reduced FAS level would receive 90 per cent. of their expected pension, capped at about 26,000, rather than 80 per cent. Since 1997, pensions have been index-linked, either to the retail prices index or to 2.5 per cent., whichever is the lower, rather than being index-linked only until people draw them at 65 years of age. According to what the unions have told me, they would then decline by more than a third in the first 10 years, and by more than 50 per cent. should the pensioner live to over 85 years old. Immediate benefits could be gained if we were to adopt the PPF proposals.

Jennifer Willott: Does the hon. Lady share my concern that the proposal to provide 80 per cent. of the expected pension relates only to the core pension benefits? For many of the people getting this support, that would equate to only about 60 per cent. of the amount that they had planned for, which represents a significant drop in their expected retirement income.

Julie Morgan: Yes, that is a matter of concern. Another issue is that there is a provision under the Pension Protection Fund for the payment of a lump sum, which many people were relying on to pay off their mortgages but which they cannot do under the FAS provisions. There would therefore be many advantages to bringing the FAS provisions up to the PPF levels.
	We have come a long way, but we need to do just a little more to sort this out in a way that is satisfactory to me and other hon. Members whose constituents have suffered as a result of these problems, and to bring the unions in to support what the Government are doing. If the problem is not sorted out now, there is always a possibility that the Government could be forced, either by the UK High Court or by the European Commission, to introduce PPF-equivalent benefits for those who currently qualify for the FAS. This issue has been a running sore. It has been going on for five years and caused huge anxiety to many people. It would be very good if we could now settle the matter and put it behind us.
	Community and Amicus took their cases to the European Court of Justice, and might be intending to go the High Court here. However, they have not started any such court action yet, because they are waiting to see whether we can sort the matter out politically. They were confident that a Labour Government would be able to sort out the different levels of the benefits.
	The High Court ruled in February this year that the Government should not have rejected the report by the parliamentary ombudsman, Ann Abraham, on pension schemes that had collapsed. The Government were asked to reconsider; they have now done so and come back with their proposals in new clause 38. The High Court decision did not mean that the Government had to compensate workers for their losses, but the ruling by Mr. Justice Bean meant that they had to rethink the issue of compensation. That has been done, and we have made huge progress, but I would like to see this go one step further so that full justice can be done. The injustice suffered by Allied Steel and Wire workers in my constituency has made me see at first hand how awful this situation has been. Thank goodness it is unlikely to happen again, now that we have the Pension Protection Fund in place, but there is still a defined group of pensioners whom we need to help.
	I am considering what the Minister has said today at the Dispatch Box. I was pleased that he guaranteed that Community and Amicus would become involved in the review process and that they would be consulted about it. I am also glad that there was a definite commitment to ensuring that the available funds would be applied to supplementing the FAS provision, to get it nearer to 90 per cent. I realise, however, that that was not a guarantee, and that some uncertainty therefore remains. I was pleased that the Minister said that the review would make its initial recommendations by the summer, and that it would report publicly. That also represents a big move forward. I know that Community and Amicus now want to work with the Government to ensure that the 80 per cent. figure moves closer to 90 per cent., which is what most hon. Members want.
	The past five years have been a sorry time for those pensioners. We have had a lot of improvements from the Government, but I want things to go a step further. However, I am considering what the Minister has said today at the Dispatch Box.

David Laws: This is an extremely important debate. We have heard two excellent speeches, from the hon. Member for Cardiff, North (Julie Morgan) and the hon. Member for Runnymede and Weybridge (Mr. Hammond). We have also heard some useful points from the Minister, albeit in a slightly more partisan tone than we are used to from him. In his opening speech, he commented on what he claimed was a pattern of behaviour by the Conservatives on this issue. As that is not the major issue that we are debating today, I shall comment not on that but on the pattern of behaviour over the past three years or more by the Government. That behaviour pattern was illustrated extremely well by the hon. Member for Cardiff, North, when she described the process undertaken over the past three years as tortuous. That is precisely what it has been.
	We know that we ended up with the financial assistance scheme in the first place only because of the determination of Labour Members and others in the House to insist on it when the Pensions Bill went through in 2004. We were then told by the Government that that was the only concession that they could make. Further improvements were then made to the financial assistance scheme and, earlier this year, it was announced that the level of compensation would be increased yet again.
	Instead of bringing the matter to a conclusion once and for all, in the interests of those individuals who have lost their pensions, the Government have embarked on the tortuous process described by the hon. Lady. It has not satisfied the pensioners who have lost their pensions, it has not brought the matter to a conclusion, and it has led to a series of very critical reports on the Governmentfirst from the parliamentary ombudsman, then from the cross-party Public Administration Committee, then from the European Court of Justice and then from the judicial review group. Sadly, it is only through that process of criticism of the Government that we have managed to proceed to a settlement considerably better than that first envisaged in 2004-05.
	I do not really know why we in the Opposition are so intent on helping the Government out of their position. Let me say in the most partisan possible terms that what the Government have succeeded in doing over the past three years almost constitutes a master class in how to extract the least possible credit from the largest possible number of concessions.
	I spoke earlier about the implementation of the financial assistance scheme and the two substantial increases that we have seen. Another concession has been made todaya helpful concession, I think, although we do not yet understand all the parametersin new clause 25, which allows the inclusion of solvent schemes. But does any Member, including the Minister, seriously believe that we have seen all the concessions that we will see from the Government? As the hon. Member for Cardiff, North suggested, they may be forced to make more concessions through the legal process; moreover, those in another place will have to scrutinise the Bill, and given the cross-party nature of what we are debating today, I strongly suspect that they will insist on changes.
	The Government have spoken of the unions' aspiration in relation to the Pension Protection Fund. It is unclear whether they share that aspiration, but amendments tabled by the Leader of the Conservative party, the leader of the Liberal Democrats, the right hon. Member for Birkenhead (Mr. Field) and others contain many proposals that the Government say they are considering in any case. It seems pretty plain thateither through the Government's being forced to make more concessions, or as a result of policies that they have already put on recordwe will end up more or less where those amendments would take us.
	Why, for goodness' sake, do the Minister and the Government not do what now seems inevitable? Why do they not deliver for the pensionersmany, as we have heard, in a very vulnerable positionwho are waiting for the compensation that is due to them? Having initially been told by the Government that no compensation was possible, over the past three years they have witnessed the tortuous process of the Government's conceding more and more without bringing the matter to a conclusion. Labour Members and others in the House would do a service to the Government as well as to pensioners if they were to bring it to a conclusion today, and not allow it to be dragged out any longer.

Mark Pritchard: The hon. Gentleman is right. The Government mean well; it is just a matter of how we achieve what we all want. A second Pensions Bill is likely to be presented next year, and it is possible that there will be a review whose recommendations could be included in it. It might be even later than this summer before anything is done for those who face immediate hardship.

David Laws: That is true. Many of us fear that people will have to wait even longer for a solution the shape of which looks obvious to most of us, and which we feel we might as well get on with delivering rather than putting those people through more pain. Moreover, many Members in all parts of the House fear that if we miss this opportunity, we may not have another opportunity to impose a sensible solution on the Government through the will of the House of Commons and, perhaps, that of another place.
	What, after all, concerns the Government? As the Minister said, it is not the substance of the amendments, but the issue of finance. The Government have already moved enormously to deliver a substantial partnow the majorityof the compensation for which we are asking. They say that they want to consider the process of annuitisation and that of securing unclaimed assets. The Minister has acknowledged that the costing figures that he has given today for delivery of the extra element of compensation do not include offsets from tax revenue from means-tested benefits. What does it all come down to, provided that the Government can secure some unclaimed assets? It seems to come down to the determination of the Government, or perhaps the Chancellor of the Exchequer, not to concede what in public expenditure terms is a minuscule amount of money.
	The Government's determination on principle not to do anything about that amount of money would be rather more convincing if they had not been dragged through the tortuous process of the past three years, providing first 400 million, then 2 billion and then 8 billion. They are now virtually where they will end up anyway. The Minister's arguments are very unconvincing. Given the closeness of his aspirations to those shared by almost every other Member, he would do a service to all of usbut mostly to the pensioners who are waiting for a settlementif he were to get on with delivering it. It is fairly obvious that we will end up with a package of a certain shape in one way or another; the question is whether that happens quickly or slowly.
	The hon. Member for Runnymede and Weybridge commented on all the new clauses and amendments, and the hon. Member for Cardiff, North gave us an insight into her thinking on a couple of them. All of them improve the present arrangements. That includes new clause 38, which we have no intention of opposing, as it constitutes a further concession to raise the level of financial compensation.
	The hon. Gentleman said that he welcomed new clause 25, tabled by the hon. Member for Cannock Chase (Dr. Wright), which allows the inclusion of solvent schemes. We welcome it as well. The hon. Gentleman said he preferred it to his own new clause 40, which was helpful. There was some uncertainty in his exchange with the Minister about precisely who would be excluded from the measure that he now envisages in place of new clause 25. I hope that light will be shed on that later in the debate. If there is indeed an element of uncertainty, we too would be happy to leave it to the hon. Member for Cannock Chase to determine the extent of the exclusion, knowing that we have the backstop of another place and the possibility of further amendments if they are considered to be strictly necessary.
	The critical aspects of new clause 38 relate to the other new clauses and amendments. We welcome new clause 24 and amendment (a) to new clause 38, tabled by the hon. Member for Cardiff, North, which improve the position by delivering the PPF level of benefits. We will support them if they are put to a vote, but, like the hon. Member for Runnymede and Weybridge, we hope that they will not be the focus of debate and of any vote that takes place. New clauses 40 to 47 also make important changes and additions to the package, which not only make it more financially robust but deliver the immediacy that many of the pensioners seek.
	The hon. Member for Runnymede and Weybridge was kind enough to pay tribute to Ros Altmann and the other pension campaigners who have done so much to shift what appeared to be the immovable object of the Government over the last couple of years and to move the debate forward. The hon. Member for Cardiff, North and many other Labour Members will know of the anxieties that still exist among pensioner groups. Even if her amendments were accepted, substantive points would remain uncovered by them that are covered by the cross-party new clauses 40 to 47, as was explained by the hon. Member for Runnymede and Weybridge. The partial inflation-linking issue is dealt with by those new clauses, but not by new clauses 24 and amendment (a) to new clause 38.
	There are other issues. There is the issue of ensuring that people receive their money, that the payment starts immediately at scheme pension age and that there is no further delay, with trustees able to pay the allowance from the scheme assets immediately. There is the issue of annuitisation, which is dealt with explicitly in the cross-party amendments. There is the issue of solvent employer schemes, which we hope will be dealt with by new clause 25 or a decent concession from the Government. There is also the issue of mitigation of the cost to the taxpayer. We understand that the Government are intent on taking action to deal with that anyway.
	Although we welcome the amendments of the hon. Member for Cardiff, North, we hope that as she agreed earlier that this has been a tortuous process she will want us to find a solution today that deals with all the major concerns. She probably knows that the position of the pension campaigners is that new clauses 40 to 47 are to be preferred, as they deliver additional benefits compared with the measures that she has tabledand, indeed, our new clause 27. We hope that new clause 41 will be the focus of the debate. We will enthusiastically support it, and we hope that Members of all parties will also do so if, sadly, the debate ends in a Division.
	The entire process of the past three years has been tortuous, but progressively the minority in this House, and certainly in the Labour party, has been converting the majority of Ministers, with some assistance from outside. There is not much further to go in that process. It is clear to me that through legal routes, steps in another place and concessions from the Government we will reach the point proposed by the new clauses under debate, so let us get on and do it today, and not waste any more time.

Tony Wright: The Bill is in many respects a reckoning with the future of pensions, but it contains within it the reckoning with the past. We all wish that it did not do so because it would be nice simply to move on to the sunnier uplands of pensions policy to come. However, as several Members have said, the fact is that many people are not able to move on as they have lost their pension. They look to this House to do something about thatlegitimately because an Officer of this House, the ombudsman, has conducted an exhaustive inquiry to establish exactly what happened and whether there was any Government role.
	I must confess that when I started to think about this matterbefore I had read the ombudsman report, and before the Public Administration Committee started taking evidence on it and talking to some of the people involvedI took a different view from that which I now hold. I thought, Well, the world's an uncertain place and risky things can happen; pensions are fragile objects and we have to live with such events. However, the more I examined the subject the less I could sustain that position. After 1994after Maxwellwe believed that we had put in place a framework of protection that would prevent such things from happening again. The ombudsman was able to show in detail that in terms of what had been said about that framework of protectionthe descriptions of the amount of safety that there was in the schemesthere had been maladministration. That is not simply a proposition of mine; it has now been demonstrated. It has been upheld in the High Court, so we know it to be the case. Therefore, we have moved on from that argument.
	That is not to say that the Governmentany Governmentare entirely liable for what has happened. That is not true. There is some liability, but the major point is that the only body or person who can organise a remedy and sort out this situation are the Government. The Government have been trying to do so, and we must welcome the fact that we have made huge progress. This is a bit like building a house. Originally, when we began with the financial assistance scheme, the Government erected one wall and said, There's some shelter and we said, But one wall isn't good enough. So they added another wall and said, There we are; that's better shelter and it was better, but we again said, It's not good enough. After that, in the Budget they added two more walls. We have the surrounding structure of a house now. That is vastly better, but we then said, But we still haven't got the roof on. The Government have responded by saying, No, we haven't got the roof on, but we know a man who can find the wherewithal to put the roof on. The Opposition have said in return, We can do better than that: we have got a man who can loan us the money to find the man who will put the roof on. Frankly, I do not care where the roof comes from. Most Members accept that we need the roof onthat we need to reach Pension Protection Fund levels. As has been said, that is a responsibility of the Houseof all Members.
	Let us consider the history of this matter. It started with the last Government. Some of the most offending literature in maladministration terms occurred under the last Government. However, the point about ombudsman investigations and all that flows from them is that responsibility is handed back to the House. When the ombudsman system was put in place exactly 40 years ago, the House sensibly decided not to give the ombudsman the ability to impose remedies. She would have the ability to investigate without any hindrance and operate completely independently and then to report to the House. She can suggest lines of remedy, but not impose them. The responsibility for that comes back to Members. We must decide what is the right thing to do. That is what we are faced with in this context. We did not think that the Government had done enough when they produced one wall, or two walls, or now when they have produced four walls. We still want to talk about putting the roof on.
	I know that the Opposition and the Government are terrified of public spending, but there are times when we have to say, We have an obligation to spend the money to do the right thingwe would like not to spend it, but we have an obligation to do the right thing. I say to both the Government and the official Opposition that I wish that they were both saying that, because the official Opposition are going to some lengths not to say thatbut instead to say that they are not prepared to sign up to propositions that commit them to moving to PPF levels. It would be easier for the House if we could test the proposition of whether we wanted to do that, and then worry about the mechanisms for doing it. The incentive to find mechanisms that work would be greater if we had committed ourselves to the objective. That might be the effect of new clause 41 and associated measures, and that is why I shall support them. Even funny money is better than no money at all, and I am prepared to accept it on that basisalthough the Government are entitled to say to the Opposition that it is funny money and that they must answer for that.
	On the new clause 25 issuethe solvent schemes issuewe know that there is an anomaly. The compensation available applies only in cases where there has been an insolvency event. That has left high and dry about 8,000 people who have been in solvent employer schemes. We all recognise that they are in exactly the same position in terms of the loss of their pension as everybody else and that there are no grounds on which we could possibly want to exclude them. New clause 25 brings their schemeswe seem to agree on the numbersinto the package that is being developed. The Minister is entitled to say that the amendments under discussion were devised over the weekend in a great hurry, but I can assure him that this one was not. A good deal of time and authority has been invested in it in this House. It comes with some good authority behind it. When the Minister says to me that it is technically deficient, my response is that I do not think that it is, because it covers exactly the same kind of schemes that are eligible under section 286 of the Pensions Act 2004. It does not in effect say, Let's open the door to any scheme that might want to fold to get some protection. It is explicitly contained within those parameters.
	I would be delighted to withdraw the new clause. All I require the Minister to say is that he accepts the spirit of the new clause and, if he thinks that it is technically deficient, he will remedy that down the road. I do not want to be left still not knowing which schemes will be covered and which will not, because that would be profoundly unsatisfactory.

James Purnell: I am happy to give my hon. Friend that assurance. We are looking at the same number of peoplesome 8,000. I did not intend to criticise his drafting, but I have been advised that the new clause would let in an extra category. The intention is to include all schemes that were wound up unfunded, preventing an employer insolvency. New clause 25 would include schemes in which debt and winding up could not have forced an employer insolvency and, therefore, the employer was healthy enough to fund more of their pension liabilities. I am happy to discuss the issue with my hon. Friend, but I hope that I have given him the guarantee that he wants. We are trying to achieve the same aims and we are happy to return to the issue in the other place if necessary.

Tony Wright: I hope that I will be satisfied with that answer. The Minister will have to come up with a form of words, because at present new clause 38the package that he has offered us todaydoes not have any provision for those solvent schemes. I have to be sure that the assurance he has given me will cover all the schemes that we think it will cover, under all the parameters that I have described.

Philip Hammond: I have listened carefully to what the Minister said and I still have a concern. He appears to be acknowledging that there is a group of people without pensions who will remain without pensions or assistance because of something that their employer has or has not done. The essential fairness in this is that it is not the problem of the pensioner or the would-be pensioner if his employer has behaved badly or correctly. We are seeking a solution that deals with the problem from the pensioners' perspective. It needs to be clear whether some people who see themselves as victims of this problem will still not be covered by what the Minister is offering.

Tony Wright: That is the point on which I need to reflect to see whether we can pin down what has been said. I take the point that we will have another opportunity to consider the issue, but I am determined to ensure that we cover all the schemes that should be covered. I do not accept, on technical grounds, the Minister's point that we would be opening the door. It would be more straightforward if the Minister accepted the new clause and, if it turned out that it needed more work, that could be done. That would be the easiest way to proceed.
	As people have said, this has been a long journey and we are not at the end of it

Philip Hammond: It is not really my place to say this, but I remind the hon. Gentleman that if one seeks a Division on a specific new clause in a group, one normally indicates as much to the Chair before ending one's speech.

Tony Wright: I do not wish to do things wrongly, but I shall reflect on the exchange that I have just had with the Minister. That seems a reasonable proposition, but I shall apprise the House of the fruits of my deliberations at the earliest possible moment. I had better stop now.

Michael Penning: As a very humble, new Back Bencher, may I say what a pleasure it is to follow the hon. Member for Cannock Chase (Dr. Wright)? The work that Members from all parties have done on this issue since I came here on 5 May 2005 has impressed me enormously. I personally praise the work of the right hon. Member for Birkenhead (Mr. Field) throughout the campaign.
	The issue was brought to my attention when I was a parliamentary candidate in Hemel Hempstead some six years ago. Just after I was selected, the former Dexion workers committee came to see me. They asked me to read their fileit was about 6 in deepand give them my opinion on whether they had been treated fairly and with dignity, whether natural justice had been done and whether trust in Parliament and pension schemes could ever be restored.
	I read every word, and when I went back to the committee I was tested. They did not trust me: they did not trust any politician. I do not think that they do today. They wanted to know whether I had read and understood the file, and whether I agreed with them that no matter who was in power, or who had made the mistakes, they had been treated appallingly. At the time, there were just over 700 of them, mostly men, but some ladies, who had paid into a scheme, at one stage, compulsorily. Following legislation, membership of the scheme was voluntary, but nobody left it because it was very good. Some people had paid in for 35 years and more.
	The campaigners had huge dignity, but they had already been around the country taking their clothes off in public. They were middle-aged men and women who had worked all their lives, done the decent thing and did not want to scrounge off the state. They did not want means-tested benefits. They wanted to work until their time for retirement came and to pay in a fair amount of money to be kept safe for them, and for their loved ones when their time came to pass on.
	I told the campaigners that they desperately needed to put their case before the parliamentary ombudsmanthe place for justice in the mother of all Parliaments. I fought hardand it is hard for a parliamentary candidateto get the ombudsman to listen to their case. I went to Front-Bench colleagues and asked them to read the file, but they said that they had seen the same thing happen to other schemes and that it should go to the ombudsman.
	The ombudsman decided that the pensioners had been misled under both this Government and the previous Conservative Government, and maladministration had taken place. Like many hon. Members, I was over the moon at that decision. I cracked a bottle of John Smith's with the Dexion pensionersI am not a champagne manand we celebrated. That did not last long. They thought that the ombudsman had ruled and that the Government would adhere to the ruling. As the hon. Member for Cannock Chase said, it is not for the ombudsman to decide what should actually happen, especially in a scheme set up 40 years ago, but it is for her to have unrestricted access to the facts and to come to a decision as to whether our constituents had been let down by the system, Parliament and the Government of the day.
	I have just met some of the campaigners, and I apologise for not being present for the whole debate. They still do not understand why the Government did not accept the ombudsman's decision. They have come so far. It is as though a velvet revolution has taken place. The hon. Gentleman said that when he first looked at the issue, he thought that such things happen in a market system, but a groundswell of opinion, led by many Labour Members and othersI have pushed it hard myself since coming herehas convinced my Front-Bench colleagues, the Liberal Democrat Front Bench and Ministers. People who told me 18 months ago that they would never support a scheme under which the Government would compensate those who lost out, because it was not the Government's fault, have now decidedrightly, in my opinionthat they do need help.
	This is not about party politics, as the Minister has joined me in meeting delegations of widows. I shall say more about the widows in a moment, but the Secretary of State, only days after taking up his post, also met a delegation that I brought to him. I passionately believe that the Department for Work and Pensions wants to settle this matter once and for all. None of us has any doubt about that, so why on earth can it not be resolved today?
	The Minister has made another move in our direction, and the Treasury seems to have come up with some extra money so that he can compensate the 8,000 people who are not covered by present schemes. We may not know where the money has come from, but we know that it is available. In the greater scheme of things, the sum involved is, frankly, peanuts. I am proud to be a member of the Health Select Committee, and we know that Government spending on the NHS now totals 100 billion. Where it goes is another question, but that is a huge amount. In contrast, we are talking about only 30 million a year to compensate the people who have lost out. That sum is expected to rise to around 100 million, and then fall again.
	I share the concerns expressed by the hon. Member for Cannock Chase. I do not understand why my party's Front-Bench spokesmen do not agree with the proposal. I have said that to them in private, and now I do so in public. We are talking about only 30 million quid, so we should make it available today. The lifeboat scheme that we have come up with has been prepared with the help of hon. Members of all parties. I hope that we will be able to vote on it later, because it will provide immediate help for the people who need it. They need that help today, not in six months or a year. Those who are in trouble cannot wait until the next Pension Bill, about which my hon. Friend the Member for The Wrekin (Mark Pritchard) spoke earlier, because many of them are dying.
	Of course, some are dying of old age or illness, but most are not the sort that we would expect to die early. The fact is that stress-related problems are leading to many deaths among those who need help. I am sure that hon. Members of all parties are aware of the disproportionate number of strokes and heart attacks suffered by the people who need our help. They are stressed out beyond belief, and that is because they are honourable people whose personal dignity means that they do not want to rely on means-tested benefits or charitable hand-outs. They worked all their lives and paid for their pensions, and they want to retire with dignity. Even so, many of them have taken up jobs that most hon. Members would refuse.

Henry Bellingham: My hon. Friend is expressing the problem in a very moving way. A number of my constituents are having to work extremely hard at a time when they should be enjoying long and happy retirements. For example, I know one person who is doing night driving for a courier company. He is working himself into the ground because he has no proper pension, and there are many others in the same difficulty. Because those proud people do not want to rely on state benefits or move into council housing they are having to work as hard as they can to pull their lives together. This debate provides an opportunity for us to save their lives.

Michael Penning: All hon. Members involved in this campaign have heard about personal tragedies such as the one so eloquently described by my hon. Friend.

Adrian Bailey: Will the hon. Gentleman give way?

Michael Penning: In a second

Frank Field: My hon. Friend the Member for West Bromwich, West (Mr. Bailey) should let the hon. Gentleman finish, as many others want to get in.

Michael Penning: The right hon. Member for Birkenhead is much more knowledgeable than I am, so I shall try to be as brief as possible.
	I shall give the House an example of personal dignity. I want to talk about a man who used to be a middle manager, earning between 30,000 and 35,000 a year before his company became insolvent three years before he was due to retire. I shall not name him, and I hope that he will not mind me talking about him, but he is now picking up litter in a public park because he does not want to rely on means-tested benefits. Why on earth has this Parliament allowed such a thing to happen?
	At the risk of sounding like an alcoholic, I shall mention beer again. I am very proud to have bought the last pint enjoyed by a gentleman called David Cheshire. He had worked for the Dexion group for many years and, just after the company announced that it was insolvent and that his pension would be lost, he was diagnosed with untreatable, terminal cancer. A week before he died, and even though he was in great pain, David Cheshire joined one of the many pensioner rallies that have been held at this House. A large group of campaigners came to the Marquis of Granby pub just behind the Home Office, and I bought a round of drinks. David Cheshire told me, I never thought I'd be here having this pint, as I didn't expect to live this long. He died a week later, just after his wife Marlene told him that everything was okay and that the pension money had come through. It was a lie, because she wanted David to go to his grave peaceful in his mind that she would be looked after.
	I give way to the hon. Member for West Bromwich, West (Mr. Bailey).

Adrian Bailey: I thank the hon. Gentleman for giving way. I fully understand and sympathise with the emotions and intentions that he outlined, but there is something that puzzles me. Those emotions and intentions would be relevant if the people involved were getting no pension at all, yet we are really talking about the 10 per cent. difference between what the Government are promising and the proposal that he is making

Hon. Members: No!

Michael Penning: I shall be generous to the hon. Gentleman and suggest that he take a quick look at the amount of money that some of these people need. The Minister has met Marlene Cheshire, as she was one of the group of widows to whom I referred earlier. At that time, she was getting 20 a week, but she should have been getting 200. If we cannot talk about something like that in the House of Commons, I am in the wrong place. I do not want to criticise the hon. Gentleman, but there are pensioners in the Lobby today and he can go and talk to them. They will tell him that they are not getting the money that is due to them. However, I should add that I took the lady about whom I have told the House to see the Minister, and the shortfall in her income has since been addressed.
	The maths of the FAS scheme is pretty simple: 3 million to be shared between 125,000 people. They are not getting anything like enough, and we need to talk about how we can help them today. We should not wait for a summer review: natural justice and the needs of personal dignity mean that we should do the right thing by them this afternoon.

Frank Field: I shall speak for only two minutes, as I know that other hon. Members with constituency interests also want to contribute to the debate. However, I shall begin by congratulating my hon. Friend the Minister on his statement today and on the extension of the FAS scheme.
	The House has it in its power to decide to extend the number of people covered by the scheme from the 8,000 announced by the Minister today to include all those who have saved yet been cheated of their pensions. Because the Minister is so talented I plead with my hon. Friends not to be beguiled by his abilities if he assures us that we should put things off to another day because there will be another inquiry.
	My two minutes are to remind the House that in 2002, when the stories began to surface, I introduced a private Member's Bill. The Government said, We must not rush things; we must think about them and hold inquiries, so we must block your Bill. The Bill provided that we should use unclaimed assets, so they began by saying, We don't know how much there is. They continued with, There is not much, followed by, Perhaps there is a bit more, but we don't own it. They then said, Perhaps we will bring in a levy but we'll put it into another schemea foundation.
	The message that I want to give to my hon. Friends is crucial, and was set out by my hon. Friend the Member for Cannock Chase (Dr. Wright) earlier: we have it in our power today to make a decision to put an end to the gross injustice that decent people, who have saved and done everything required of them, have been cheated of their inheritance. We should make that decision for justice's sake, but we should also make it for the Government's sake, because they still seem unable to realise that as long as that sore continues to fester, they will find it impossible to kick-start the savings habit in our community. Why should one save when one knows that all too many people who did precisely that at the Government's behest now feel themselves cheated? Today, we can stop that cheating by supporting new clause 41 and I hope we shall do so.

Michael Weir: I, too, will be brief. I want to support new clause 25 tabled by the hon. Member for Cannock Chase (Dr. Wright).
	I very much welcome what the Minister said about assistance schemes this afternoon, although it is a pity that we do not have the provisions before us so that we can see exactly what he is proposing. I know that the provisions of new clause 25 would deal with my concerns about a pension scheme in my constituency, but I am not sure whether the Minister's proposals would cover that scheme.
	The problems with schemes for solvent employers have poisoned the well of pension reform for far too long. They have been left out of the financial assistance scheme, although there is little to choose between what has happened to them and to insolvent employers. I cite the case of a scheme in the small burgh of Kirriemuir in my constituency. The company remains in beingindeed, it provides valuable jobs in the communityyet workers nearing retirement find that their pensions provide nothing like the sums they expected. The scheme is being wound up and the value of each pensioner's pot is to be paid into a private pension scheme. An employee described for me the situation when they were told that the scheme was being wound up: they were told, in effect, It's your pension or your job. It is difficult for people in small communities to come to terms with that.
	I am told that the company would have gone into insolvency had the scheme not been wound up. The wind-up started in June 2004 and has not yet completely finished, so I want to be sure that people such as my constituents would be covered by the new aspects of the financial assistance scheme that the Minister announced today. I am sure that new clause 25 would cover their situation, but it is a great pity that we do not have the Minister's proposals. What tests will he apply in relation to insolvency? What evidence will a company have to produce before it can be covered by the new scheme? In the case I described, the employees were told that the company would go into insolvency unless the scheme was wound up.
	What made things worse for many employees in that case was that the pension scheme was put under a trustee company, which was also undertaking the winding-up process, and workers found it difficult to obtain information. They were told that the cost of answering their questions about the wind-up of the scheme would be set against its assets, thus further reducing the amount available to pensioners. A circular from the trustee company states:
	Please remember that there is a cost to answering questions from members, meaning that the funds in the scheme will be further depleted.
	Not unnaturally, members wondered what to do. Should they pursue their interests, or would that mean that they were throwing away even more of their money? They were in an impossible situation.
	If the scheme that the Minister has announced covers such people, it is very welcome indeed, but as has been said by other Members we need clarity today; this poisoned situation must not drag on. We cannot move on with pension reform, in particular the personal accounts that the Government propose, unless we deal with the problems now.
	I intend to support the cross-party amendments on the lifeboat fund, but new clause 25, or a similar provision, must be passed in conjunction with them if we are to bring justice to all the pensioners who have suffered in this disaster.

Alan Simpson: I realise that for many Members the whole question of the administration of pension funds is extremely complex and detailed. I find it useful to refer back to the time when I started as a county councillor in Nottinghamshire. We had just appointed a chief executivea person who, at that time, called himself Mick Lyons. He has been elevated somewhat since then. He invited us to identify problems in the administration of local government within the county. A number of us identified that schools were having serious problems in accessing the resources that they needed. He got a number of councillors and a number of the officers in different departments together and he asked people to explain what the problem was and what was causing the gap between the time when the schools sought to requisition pencils and paper and the time when anything arrived. The delay was often six weeks, two months or two and a half months. He listened patiently to the explanations from officials in different departments for about 20 to 25 minutes. Then suddenly he banged his hand on the table and said, Right. I've got a plan. Everyone shut up and listened to him. He said, Send the bloody pencils and the paperwork can follow. I don't care about the paperwork that follows. It's not that it's not important, but schools are about learning. It is about delivering the resources for learning. If schools haven't got pencils and paper, we are undermining their primary function. So send the bloody pencils.
	If we were having that same debate among ourselves today, the central issue would be, Send the bloody pensions. It is not about the technicalities. The reason why I support new clause 41, which is a cross-party new clause, is that it says precisely that. We have a moral duty to pay people's pensions today and to use the lifeboat fund to work out among ourselves how best to reclaim the resources that we have at our fingertips in order to do that. My only quibble in political terms is that I wish that new clause 41 had been tabled principally in the name of my right hon. Friend the Member for Birkenhead (Mr. Field), because, as been acknowledged, the origin of almost everything in that new clause was rightly encapsulated in the private Member's Bill that he presented to the House in 2002. It would be helpful for our own Members to be able to recognise and claim the integrity of that as a starting point. But I no longer care who claims the credit. What I am concerned about is that we are dealing with people who have never asked for a penny of a handout in their lives. They are people who have done what successive Governments have asked them to do: take money out of their weekly and monthly earnings and put it into pension funds in order to provide for their old age. We will not be able to convince successive generations who follow that that is a sensible step if their parents or grandparents say to them: We were mugs. We put the money aside and people stole it.
	The great attraction of what is incorporated in new clause 41 is that it allows us to draw a simple line under a debate that will not go away if as a House we fail to take this decision today. New clause 41 brings everyone under the cover of the Pension Protection Fund. It does not say that there is going to be a huge delay. It says that we will pay out today and that we will work out how we will reclaim and repay the assets afterwards. It does not presume that there are billions of pounds to be found. However, the volume of unclaimed assets in this country is about 15 billion3 billion in unclaimed pension funds, 5 billion in terms of banks and building societies, 3 billion in national savings, and another 1 billion to 2 billion in residual assets in the existing schemes. So we would not be short of possible sources. Nor is it true to say that all that money would have to be found now. My understanding is that the 600 million that would need to be put aside works out, on the Government's own figures, at about 20 million a year. Just to provide a reference point, we should understand that the error factor in the Department for Work and Pensions budget for the administration of benefits last year was not 20 million, but 700 million.
	It is not beyond the Government's and the House's capacity to incorporate everyone affected into a scheme that would achieve what we promised at the end of the Maxwell fiasco. We promised people then that it would never happen again. Yet we now find ourselves in a position, five years after an event, in which many people who saved throughout their lives are livingand, in some cases, dyingin abject poverty. That is morally outrageous and morally indefensible.
	I would like to end on a non-technical and non-political point with the line of a song by Tracy Chapman [Interruption.] I will spare the House by not singing it! In that song, she said:
	A love declared for days to come is as good as none.
	The same could be said about a pension, so I hope that the House has the decency to do the morally right and the politically and financially accessible thing by drawing the line today and supporting new clause 41.

Henry Bellingham: It is a pleasure to follow the hon. Member for Nottingham, South (Alan Simpson), who spoke very eloquently; and I support my hon. Friend the Member for Hemel Hempstead (Mike Penning), who spoke with great passion and huge knowledge.
	I represent a significant number of former employees of the Albert Fisher group, who have lost the bulk of their pensions. Like my hon. Friend the Member for Hemel Hempstead, I have had numerous meetings with that group, as a result of which I have also met many other people involved in different pension action groups. One thing that struck me is that those people trusted the advice that they were given and invested their moneytheir own wagesin what they believed were safe products, only to have the rug pulled from under them.
	I would like to pick up on one point that the Chancellor made yesterday. When he was justifying the changes to dividend tax credits in the 1998 Budget, he said that they were more than compensated for by cuts in corporation tax. However, dozens of companies did not benefit from those cuts because they were either breaking even or making a loss. In the case of the Albert Fisher group, part of the food processing sector, particularly the frozen food sector, was struggling and under very substantial pressure. That company was not making a profit, so the concessions on corporation tax were of absolutely no benefit whateverand the same applies to dozens of other companies as well. What the Chancellor said yesterday was irrelevant to those companies, which got no benefit from corporation tax changes, so the hit to them in respect of pension funds was direct and immediate. There was immediate pain and the result was that many of the pension schemes went bust with people suffering as a consequence.
	I intervened earlier on the Minister, who was very critical of the Opposition amendments, but those amendments had been carefully thought through. They were not worked out on the back of a cigarette packet over the weekend. A number of experts gave us advice. As to Ros Altmann, she has a huge amount of experience and commands phenomenal respect. To be fair, until quite recently, Ros Altmann was saying that what we were doing with our draft amendments was not good enough. She said that the amendments did not go far enough, were not properly drafted and were technically incorrect, so Opposition Front Benchers put a great deal of effort and work into drawing up a package of measuresthe amendments and new clausesthat would go as far as possible and, above all, give these people some immediate respite.
	On the point about a review, we have had endless reviews. Time and again, the Government have introduced changes and initiatives, and every time, they creep a little bit further towards the full measures that those people want and deserve. What we want nowwhat is on offer with these amendments and new clausesis immediate relief. What those people want is immediate relief. As my hon. Friend the Member for Hemel Hempstead said a moment ago, a lot of those people are suffering as we speak. Many of them are ill.
	Lots of very proud people were looking forward to a long and happy retirement, but they have had that retirement totally undermined and destroyed. Those people deserve immediate action. They want immediate action. We have a huge opportunity this afternoon to give them that action, and there is a very strong moral case for doing so. I appeal to Labour Members to support these amendments, because a lot of people are watching them very carefully. If they support us, those people will have the relief that they deserve.

Sandra Osborne: I thank the hon. Member for North-West Norfolk (Mr. Bellingham) for curtailing his comments, and I shall try to curtail mine.
	On 22 January 2002, I was fortunate enough to secure a debate in Westminster Hall that allowed me to raise the plight of more than 1,000 former workers of United Engineering Forgings in the United Kingdom who had lost most of their expected pensions when the company went into administration. Since then, as we have heard, along with my colleagues on the Labour Benches, I have tabled early-day motions, tabled amendments, met Ministers and generally campaigned with the trade unions for a solution to what I still see as a major injustice.
	The Government recognised that injustice and the fact that hard-working people had been affected, but they did not recognise that compensation was required. However, as other hon. Members have said in the debate today, we achieved incremental success in securing help for those who lost out and, crucially, legislation has been passed to ensure that never again will people be deprived of the pensions that they have paid into all their working lives.
	The Government have said at every stage of the debate so far that they have gone as far as they can go, and subsequently, they have gone further. So I am very interested to hear what the Minister said about the fact that they are prepared to go further again. There is no question but that a substantial amount of public money has been allocated to the financial assistance schemesomething that has not been adequately recognised in the debate or in general over the past five years.
	The Conservative party said before the last election that it would not commit any further public money than had been committed already to the financial assistance scheme. I wonder whether I can take it from that that the Conservatives would not have come up with the 8 billion that is now in the pension pot?

Michael Penning: I stood on a manifesto, defending the Dexion workers, in which we said that we would compensate them from the unclaimed assets. That was in our manifesto, and that is what we stood on.

Sandra Osborne: I can remember Tory Front Benchers telling me on the Floor of the House that they would not commit any further public money, and that was the position that they took.
	Those who lost their pensions, whether before or after 5 April 2005, are all innocent victims, and they all deserve to be treated equally. I have always thought it quite ironic that those who campaigned for justice in this matter will receive less as things stand at the moment than the beneficiaries of their campaign in the form of the Pension Protection Fund. Therefore, I believe that there should be equity. According to the trade unions, they have evidence that the 8 billion may in any case be enough to settle that issue. I do not know whether that is the case, but, obviously, it would be welcome. The Government have set up a review and said that they are open to suggestions. In my Westminster Hall debate more than five years ago, I made both these suggestions: pooling the assets of pension funds and holding the private sector to account.
	I will conclude by referring to the private sector. Prudential's venture capital company was the majority shareholder in UEF. I have met the chief executive on several occasions to call for the company's help, but that has not been forthcoming. I wish the Government all the luck in the world in trying to get the private sector to contribute towards the financial assistance scheme.

James Purnell: This has been a good debate. Everyone in the House has sympathy for the people who have been affected. The Government are saying that we will put in taxpayers' money so that people are paid out with at least 80 per cent. We are setting up a review to examine what more can be done and to consider the Opposition's suggestions and all the points made by hon. Members in the debate.
	It would be wrong to give people false hope, but I am afraid that the Tory amendments would create exactly that risk. They have unravelled even during the debate. The hon. Member for Runnymede and Weybridge (Mr. Hammond) said that there would be an increase in public spending, but that directly contradicted the comments of the shadow Chancellor this morning on Sky News, when he said that there would not be an additional burden on public spending. It would be better for the House to wait for the review than to accept the amendments.

Tony Wright: On the basis of what I think that the Minister has told me, even though there is still some uncertainty, I will not press new clause 25 to a Division. Will he assure me, the Opposition and other hon. Members that the words that will be presented to the House of Lords will reflect what he said today?

James Purnell: I assure my hon. Friend that the wording will do exactly that.
	We have a basis on which we can move forward on both that point and on the issue of 80 per cent. for the people affected. The review will examine moving beyond that, and that is the exact basis on which we should move forward.
	 It being two and a half hours after the commencement of proceedings on the motion, Mr. Deputy Speaker  put  forthwith  the Questio n already proposed from the chair,  pursuant to Order [this day].
	 Question agreed to.
	 Clause read a Second time, and added to the Bill.
	Mr. Deputy Speaker  then  proceeded to put  forthwith  the Questions necessary for the  disposal  of  the  business  to be concluded  at that hour.

New Clause 41
	  
	Pensions Protection Lifeboat Fund

'(1) There shall be established as soon as reasonably practicable a Pension Protection Lifeboat Fund (the Lifeboat Fund) which shall be administered by the Board of the Pension Protection Fund (the Board).
	(2) The purpose of the Lifeboat Fund shall be to make supplementary payments to persons who are qualifying members of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 (S.I. 2006/1986) (or who would be qualifying members if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age), in addition to the sums payable in any event under those regulations.
	(3) The supplementary payments made to any person in accordance with subsection (2) shall equal the amount that, taken together with any amounts payable to that person under the Financial Assistance Scheme and amounts payable to that person as scheme benefits under the qualifying pension scheme in respect of which he is a qualifying member of the Financial Assistance Scheme (or would be a qualifying member if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age), is the amount that would be payable to that person if that qualifying pension scheme was accepted into the Pension Protection Fund.
	(4) The Secretary of State shall make such loans to the Lifeboat Fund as are necessary to allow the discharge of its functions and in particular its obligation to make supplementary payments under subsection (2).
	(5) The Secretary of State shall make such loans from time to time having regard to
	(a) requests for such loans received from the Board;
	(b) the amount of assets transferred or to be transferred to the Lifeboat Fund under the Scheme (as defined in section [Transfer of unclaimed assets] (the Scheme));
	(c) the level of any claims on the Lifeboat Fund in respect of assets transferred to it under the Scheme.
	(6) Loans made in accordance with this section must be repaid to the Secretary of State as soon as, in the reasonable opinion of the Board, it is prudent to do so having regard to
	(a) the obligations of the Lifeboat Fund;
	(b) the amount of assets transferred or to be transferred to the Lifeboat Fund under the Scheme; and
	(c) the level of claims on the Lifeboat Fund in respect of assets transferred to it under the Scheme.
	(7) Loans made under this section shall be interest free.
	(8) The assets of the Lifeboat Fund shall be held separately from the assets of any other fund under the control of the Board.
	(9) The Secretary of State may by regulations make further provision in connection with the Lifeboat Fund.
	(10) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.'. [Mr. Hammond.]
	 Brought up, and read the First time.
	 Question put, That the clause be read a Second time:
	 The House proceeded to a Division.

Mr. Deputy Speaker: I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 260, Noes 282.

Question accordingly negatived.

Clause 27
	  
	Extent

Amendment made: No. 19, in page 24, line 37, at end insert
	'( ) section (Financial assistance scheme: increased levels of payments),'. [James Purnell.]

Clause 28
	  
	Commencement

Amendments made: No. 20, in page 25, line 10, at end insert
	'( ) section (Financial assistance scheme: increased levels of payments)(4) to (11);'.
	No. 21, in page 25, line 17 , at end insert
	'( ) section (Financial assistance scheme: increased levels of payments) (1) to (3);'. [James Purnell.]

New Clause 7
	  
	Performance of the Personal Accounts Delivery Authority

'(1) In discharging its functions under this Part of the Act, the Authority shall ensure that its actions and advice support the following objectives for the scheme
	(a) ensuring that the overall outcome, taking account of the impact on the existing market, is an increase in the number of people saving and the overall amount being saved;
	(b) optimising levels of participation and contribution among the target group;
	(c) setting an investment strategy in the best interests of members;
	(d) minimising burdens on employers;
	(e) minimising the impact on other high-quality pension provision;
	(f) assuring security of administration;
	(g) governing in the best interests of members and beneficiaries;
	(h) ensuring that the board acts impartially, prudently, responsibly and honestly;
	(i) delivering appropriate levels of choice;
	(j) achieving charges that are fair and reasonable;
	(k) ensuring the funds are invested in the best interests of the members.
	(2) Her Majesty may from time to time by Order in Council make provision for amending the objectives set out in subsection (1).
	(3) No recommendation shall be made to Her Majesty to make an Order in Council under subsection (2) above unless a draft of the Order has been approved by resolution of each House of Parliament.'. [Mr. Waterson.]
	 Brought up, and read the First time.

Nigel Waterson: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: New clause 29 Winding up of Personal Accounts Delivery Authority 
	'(1) If the condition in subsection (2) is satisfied the Secretary of State must by order provide for the winding up and dissolution of the Authority.
	(2) The condition is that it appears to the Secretary of State that in excess of 29 per cent. of the population over state pension age will, at the time of the introduction of personal accounts, be entitled to claim pension credit or another means-tested benefit.
	(3) Subsections (5) to (8) of section 21 apply to an order under this section as they apply to an order under that section.'.
	Amendment no. 7, in clause 19, page 21, line 28, at end insert
	'(2A) In discharging its functions under this Part, the Authority shall publish no later than 1st December 2007
	(a) estimates of the percentage of those people without existing occupational or personal pension provision who would be subject to means-testing if enrolled in personal accounts;
	(b) estimates of the percentage of people who will be auto-enrolled into personal accounts who can be expected to secure returns of
	(i) 2 or more for every 1 saved,
	(ii) 1 or more for every 1 saved,
	(iii) less than 1 for every 1 saved;
	(c) a breakdown of the target groups for personal accounts that are most at risk of low returns on their savings;
	(d) plans how generic financial advice will be delivered to those people who are liable to be auto-enrolled in personal accounts.'.
	Amendment no. 3, in page 22, line 6, at end insert
	'(7A) Before issuing guidance under subsection (6) the Secretary of State shall consult
	(a) the Authority;
	(b) organisations appearing to him to be representative of consumers;
	(c) organisations appearing to him to be representative of employees;
	(d) organisations appearing to him to be representative of employers;
	(e) organisations appearing to him to be representative of the financial services industry;
	(f) such other persons as the Secretary of State considers it appropriate to consult in relation to the guidance.
	(7B) A draft of any guidance proposed to be issued under this section shall be laid before each House of Parliament.
	(7C) Guidance shall not be issued under this section until after the period of forty days beginning with
	(a) the day on which the draft is laid before each House of Parliament; or
	(b) if the draft is laid before the House of Lords on one day and the House of Commons on another, the later of those two days.
	(7D) If, before the end of that period, either House resolves that the guidance should not be issued, the Secretary of State must not issue it.
	(7E) In reckoning any period of forty days for the purposes of subsection (7C) or (7D), no account shall be taken of any time during which
	(a) Parliament is dissolved or prorogued, or
	(b) both Houses are adjourned for more than four days.
	(7F) The Secretary of State shall arrange for any guidance issued under this section to be published in such manner as he considers appropriate.'.

Nigel Waterson: rose[ Interruption. ]

Mr. Deputy Speaker: Order. Will Members who are leaving do so quietly and as quickly as possible?

Nigel Waterson: Thank you, Mr. Deputy Speaker. It is a great pleasure to introduce new clauses 7 and 29, and amendment No. 3, which were tabled by my hon. Friends and myself.
	New clause 7 is concerned with the design of personal accounts. As you know, Mr. Deputy Speaker, that is the new system that the Government have introduced to encourage pension saving, which is based on the proposals in the Turner report. So that there is no doubt, the official Opposition wish the personal accounts system to succeed, so we wish it to be designed properly. We do not wish to inherit a system that is flawed or designed to fail. New clause 7 is largely taken from that part of the Government White Paper that sets out the criteria for the operation of personal accounts. However, there is a serious philosophical difference between the Government and ourselves on this part of the Bill. They are far too keen to set up the personal accounts delivery authority and leave it to the authority to sort out the detailed design of personal accounts and make all the difficult decisions. We do not see it that way at all. There are serious issues that need to be addressed now, and in the next pensions Billthere is always another pensions Bill around the cornerby politicians. I am not suggesting for a moment that we should second-guess the experts on the detailed technical stuff, but it is the job of politicians to make decisions about the broad structure of personal accounts and the way in which they sit alongside existing pension provision.
	I am delighted that we are supported by such bodies as the Association of British Insurers, which we heard about a little earlier, and the National Association of Pension Funds. The ABI, in its briefing that it produced for the debate, states:
	The Delivery Authority needs sound governance and clear objectives...They should be set out on the face of this Bill, which is not currently the case.
	It emphasises the need to
	take account...of the potential impact on the existing pensions market, including the need for a level regulatory playing field; ensure that Personal Accounts are designed to focus on the target market
	I shall return to that in a moment
	...and avoid taxpayer subsidy by ensuring all costs are ultimately recovered.
	The NAPF says similar things. It believes that
	the PADA should be given clear statutory objectives in this Bill.
	It goes on to say:
	In particular, we think it is vital that PADA's objectives include minimising the impact of Personal Accounts on existing good quality pension provision.
	Indeed, at a seminar on 16 January this year, which I was not privileged to attendI cannot imagine what I was doing that daythe Minister told an NAPF audience that the personal accounts system would have
	a specific legal objective of ensuring that the impact on the existing market is minimised.
	We need to hear more about whether he has resiled from that position, intends to accept our new clause, or merely intends to put that clear legal objective into the next pensions Bill. The NAPF goes on to say that
	PADA should be set an objective to ensure that it operates in such a way that does not interfere with existing occupational or personal pension schemes.
	We entirely endorse that point of view.
	On Monday this week, at a seminar organised by Scottish Widows, Mr. Robert Wyllie of Scottish Widows had some trenchant things to say along similar lines. He talked about the target market, the initial capital requirement of between 1 billion and 2 billion for establishing personal accounts, the need to enshrine the lack of a Government subsidy for the delivery authority, and the need for a level playing field. Of the contribution limit, which I will deal with in more detail in a moment, he said:
	Frankly there is no way to guarantee that Personal Accounts will not lead to some degree of levelling down.
	At the same seminar, the highly respected pensions guru, Mr. Alan Pickering, said that it was the role of politicians to make these key decisions rather than the people running the delivery authority.
	Many of the points set out in the new clause are, I hope, largely uncontroversial, not least because they were, as I say, lifted almost word for word from the Government's own White Paper. I particularly want to concentrate on paragraphs (a), (b) and (e). Paragraph (a) refers to
	ensuring that the overall outcome, taking account of the impact on the existing market, is an increase in the number of people saving and the overall amount being saved,
	paragraph (b) refers to
	optimising levels of participation and contribution among the target group,
	and paragraph (e) refers to
	minimising the impact on other high-quality pension provision.
	That is because we, and the pensions industry, are worried about mission creepno reflection on the Minister intended.
	The best indicator of that is the Government's attitude to the contribution cap. The Turner commission could not have been clearer in its recommendation that it should be set at 3,000, and the official Opposition agree with that level. It is a ground for genuine concern that the Government inexplicably announced that they wished to increase it to 5,000, which would mean that personal accounts could include nearly 95 per cent. of existing pension savers, thereby straying a long way from the concept of the target audience. We were therefore delighted when in a recent answer at DWP questions the Secretary of State said that he was reconsidering the level of the cap. That is a relief for us, as an increase to 5,000 would be unacceptable and would jeopardise the future of consensus building between the main parties.
	Some argue for an even higher cap or no cap. With all due respect, I believe that they are misguided and fail to grasp that the point of personal accounts is to target the unpensioned. We therefore wish to make it clear that the success or failure of personal accounts crucially depends on increasing not only the number of savers but savings overall.
	Proposed paragraph (b) is self-explanatory. The point is to optimise participation among the target group as defined in the Government's White Paper. Proposed paragraph (e) expresses our concern about the dangers of levelling down. It is said that some levelling down has already occurred and, with more than 60,000 schemes closed on the Government's watch, that can hardly be denied. The Minister is fond of saying that there is currently nothing to stop levelling down. However, how many companies, having calculated the cost of increased participation based on auto-enrolment, will be tempted to close their existing and more generous schemes and point their employees towards personal accounts? It will be all too easy for the contribution levels inherent in personal accounts to be perceived as the norm, whereas they will not deliver a comfortable retirement.
	Much work remains to be done on restricting transfers, exclusions and the sort of quality mark that the NAPF proposes for existing schemes. However, the contribution cap is an important litmus test of the Government's true intentions in the Bill. Do they genuinely intend to target those groups in society that do not save for their retirement, or are they more concerned with the back-door nationalisation of the most successful private pensions system in the world?
	New clause 29 deals with means-testing, which is a cancer that eats away at saving for retirement. It can be intrusive and demeaning and it is no guarantee that help will get to those who need it most. Pension credit has tested to destruction the theory that means-testing is the answer to poverty. Some 1.5 million people who are entitled to pension credit do not claim it, and some 2 million pensioners live in poverty in this country. The ABII am happy to rely on its views on the matter and on many other issuesstated that much greater clarity was needed on the Bill's impact on future levels of means-testing. That is absolutely right.
	There are conflicting views about means-testing, even in Government. The Chancellor is keen to extend the number of people who depend on the state. He has vastly increased the number of people who are employed by the state. Approximately a third of peoplemore in Scotlanddepend on the state for all or part of their livelihood. Nearly 50 per cent. of pensioners are already subject to means-tested benefits.
	To their credit, Department for Work and Pensions Ministers, in extolling the virtues of their pension reforms, point to the fact that, if we go on as we are, some 80 per cent. of pensioners will be means-tested by the middle of the century. On any view, the likely amount of means-testing after the reforms will be crucial to the success or failure of personal accounts.
	As the official Opposition, we naturally wish savings to be restored to the sort of levels that prevailed under the previous Conservative Government. Will personal accounts achieve that? I believe that the answer depends on whether means-testing can be reduced significantly. It was clear, even before the Bill was introduced, that significant differences existed between the Government's projections on means-testing and those of independent bodies such as the Pensions Policy Institute. It reaches sharply different conclusions from those of the DWP.

James Purnell: I just want to clarify the intention of the hon. Gentleman's new clause. We already have a situation in which more than 29 per cent. of pensioners are means-tested in retirement, and the figure was more than 29 per cent. when the Conservative party was in power. It is also forecast to be more than 29 per cent. in 2012. Is the hon. Gentleman saying that the Conservatives would not introduce personal accounts unless the figure dropped below 29 per cent.? If so, what is their plan to get the figure below that level?

Nigel Waterson: I am delighted to tell the Minister that I shall deal with those very points in a moment. He will probably already have guessed, however, that this is a probing new clause, albeit an important one that is designed to squeeze out of him a commitment to reducing means-testing to those kinds of levels. I shall develop the point that he has raised in a moment.
	The Pensions Policy Institute is looking at a range of the possible extent of pension credit of one third to two thirds in 2050, with what it calls
	a base case of no change from today's level of 45 to 50 per cent..
	This could mean, to quote its document,
	between 4 million and 6 million households eligible for pension credit.
	This is precisely why we urged the Government to agree to an evidence session under the new procedures during the Committee stage of the Bill, in order to hammer out these differences and the reasons for them. The Government's own projections show means-testing at about one third, post-reform. I can see that that represents progress from the current levels, but it still remains historically high. Apart from anything else, how will people near the beginning of their careers know whether they will be one of the third, or one of the two thirds? Will not the knowledge that they have a one-in-three chance of being means-tested in retirement have an effect on their behaviour?
	We learned with great sadness, however, that the Minister had declined our invitation to hold an evidence session. Instead, he invited us to a seminar on the subject, which is his default position at the moment. There is a real danger of those of us who follow the Bill becoming seminar junkies. Anyway, we all duly turned up and listened to the views of the DWP and the PPI. By the end of the seminar, I wasas F. E. Smith might have put itnone the wiser but much better informed. It was clear that different methodologies were being used by the two contenders. For example, the PPI included the effects of housing benefit, but the DWP did not. Where the PPI failed to score was that, unlike the DWP, it did not have an amazing machine whirring away in the basement to produce its projections.
	The nearest that we came to consensus on means-testing levels was the conclusion that there was
	a range of plausible outcomes,
	which I hardly think was worth the trouble and expense of laying on the seminar in the first place. But there we are; I do not want to seem churlishhow would I fill my days otherwise? But there remains a big gap, and little prospect of closing it. In fairness, apart from the obvious difficulty of projecting figures so far ahead, one of the imponderables is how successful personal accounts will turn out to be.
	On the face of it, new clause 29 looks somewhat draconian, as the Minister said earlier. It proposes that if more than 29 per cent. of pensioners are subject to means testing by the time of the introduction of personal accounts, the delivery authority should be wound up. The 29 per cent. figure is a Government figure; they project that the proportion of means-testing will fall from about 45 per cent. to about 29 per cent. by 2050, following the reforms. We take the viewI would be interested to hear whether the Minister agreesthat any higher level than that would seriously jeopardise the future of personal accounts.
	As I have said, however, this is a probing new clauseunlike the previous onedesigned to draw out the Government's thinking. Does the Minister share our concerns and those of the industry about means-testing? How committed are the Government to rolling back means-testing? How has their thinking developed since the Committee stage and the seminar? I ask those questions not just as a member of the official Opposition and not just in a spirit of consensus on long-term pension reform, although that is important. I ask them also because we do not wish to inherit a system that has clearly been set up to fail. These are issues that need to be addressed now.

Sally Keeble: What would the hon. Gentleman count as means-tested benefits? If the aim of the Oppositionwho obviously want to be the Governmentis to phase them out, I think people would like to know whether they include housing benefit, council tax benefit and the various disability and carers' top-ups.

Nigel Waterson: The hon. Lady, whose contribution to the Committee was greatly valued, has more or less summarised the benefits that I would include. Council tax benefit, which she mentioned, has a lower take-up than any other means-tested benefit. We should recognise, as a matter of practical politics, that there will always be some means-testing in the system, because there will always be people who are sufficiently poor to need help from means-tested benefits. As I have said, the problem with mass means-testing of benefits such as pension credit is that many people who are entitled to those benefits do not claim them, for whatever reason. I am sure that in our constituencies we all do our best to encourage home visits by the Pension Service, and encourage people to make the telephone call that enables them to fill up the form.
	The good news, as the Minister will no doubt tell us, is that after some wobbling on the issue, the Government have confirmed that pension credit will continue to rise in line with earnings for the foreseeable future. We think that both Front Benches, in a spirit of consensus, should aspire to reduce means-testing in the medium term, which may mean committing funds to increasing the state pension even further than is envisaged in the reforms. Those, however, are aspirations rather than current spending commitments.
	Broadly speaking, the more means-tested benefits there are and the more people are likely to fall within their ambit, the less the take-up is likely to be and the more people who really need help are likely to receive it.
	My amendment No. 3 mirrors an amendment tabled in Committee. It suggests that before the Secretary of State issues guidance under clause 19, he should consult various groupsthe delivery authority, obviously, but also bodies representing consumers, employees, employers and so on. What happened in Committee is what is always happening in Committee: a Minister says that the Government are going to take the action anyway and does not see why it should be specified in the Bill, and we say, If you are going to do it anyway, why not include it in the Bill? I can tell the Minister now that I do not intend to go to the stake on the amendment today, but I think it was worth bringing it here from Committee.
	Amendment No. 7unusually for a Liberal Democrat amendmentis quite sensible and modest. It would certainly be useful to have such information in the public domain. The amendment touches on the vexed question of  generic financial advice. I am still unconvinced that generic advice is not a classic oxymoron, but fortunately the Thoresen review is under way and no doubt it will find a way of squaring the circle. I do not know whether the amendment will be pressed to a vote, but if it is, we may well support it.
	I hope that what I have said, particularly about the two new clauses in my name, gives some flavour of what we are trying to achieve. I look forward to hearing the Minister's comments in due course.

Danny Alexander: It is a pleasure to have become involved at this late stage in such an important Bill. I have observed its progress closely, although my hon. Friend the Member for Yeovil (Mr. Laws) has been very much in the driving seat.
	Let me say a little about amendment No. 7. It dwells in detail on points that the hon. Member for Eastbourne (Mr. Waterson) made in his speech. It seeks to provide a mechanism for clarifying some of the issues he described about the likely extent of continued means-testing under the new arrangements proposed in the Bill and to offer objective analysis of that issue. It also seeks to offer analysis of the likely returns that different groups of people who will be auto-enrolled into personal accounts might expect to receive.
	The hon. Member for Eastbourne referred to a seminar that I and many other Members attended. It sought to clarify the difference between various assessmentsprincipally the Government's assessment and that of the Pensions Policy Instituteof the proportion of people who will be subject to means-testing under the Government's proposed pension arrangements. It forecast that the proportion will probably be about 29 per cent.that is still its central estimatebut the PPI has suggested that about 45 per cent. of pensioners are likely to be subject to means-testing. The seminar clarified the reasoning behind those different estimates. As someone who is not a pensions expert, the evidence seemed to me to leave a wide range of possibilities about the proportion of people who will be auto-enrolled into personal accounts and who will continue to be in receipt of means-tested pension benefits.
	That will have a substantial impact on how worth while it is for someone to save in a personal account and on other aspects of their personal circumstances. In particular, it will have a significant impact on the likely returns that people who are auto-enrolled into personal accounts can expect to receive. That is the subject of proposed new subsection (2A)(b), which requires the delivery authority to publish estimates of the proportion of people
	auto-enrolled into personal accounts who can be expected to secure returns of
	(i) 2 or more for every 1 saved,
	(ii) 1 or more for every 1 saved,
	(iii) less than 1 for every 1 saved.
	Clearly, the range of possibilities is wide. My hon. Friend the Member for Yeovil made it clear in Committee that there seems to have been a degree of uncertainty and confusion from the Government about the proportion of people likely to expect those differing levels of returns. On Second Reading, the Secretary of State said in response to a question from my hon. Friend that
	the vast majority of people will be able to look forward with some confidence to receiving 2 back for every 1 put in.[ Official Report, 16 January 2007; Vol. 455, c. 665.]
	Subsequently, the Department for Work and Pensions issued a paper entitled Financial incentives to save for retirement, which stated that
	the system that we propose, in combination with the introduction of personal accounts, will see the large majority of people...expecting a payback well in excess of 1...for every 1.
	There is a substantial difference between a payback of 1 for 1 and of 2 for 1. Looking forward, it might be difficult for Ministers and their officials to work out with any degree of certainty what the returns are likely to be. The purpose of amendment No. 7 is to require the delivery authority to do so.
	The timing suggested in our amendment is important. We want the estimates to be brought forward by the authority no later than 1 December 2007. That would ensure that the figures, analysis and information that the personal accounts delivery authority was able to provide through its expert analysis would be available to the House, before it completed its consideration of the Bill that will no doubt be introduced in relation to personal accounts, to inform its judgments about the proportion of those auto-enrolled who will be on means-tested benefits, and the likely returns that they can expect. That information should be in the public domain and before the House so that it can form a big part of the debate.
	If 45 per cent. of people are to be in receipt of means-tested benefits, they face some serious risks to saving in the personal accounts into which they will be auto-enrolled. It would be wrong for the House to consider a Bill that would set up such personal accounts without having that important information to hand. We also need to have information about the likely returns of such accounts. Such information is also critical to the marketing and promotion of personal accounts. The hon. Member for Eastbourne mentioned generic advice, but there are big questions about whether saving in personal accounts would be worth while for some people in that category, depending on the outcome in relation to means testing and the returns that they can expect.
	When the Minister responds, I hope that he will be able to reassure us about how he intends to ensure that accurate information, which is as near to definitive as possibleor at least based on as wide a consensus as possibleabout those two aspects will be made available to the House. That is what we seek to achieve, and I look forward to the Minister's response.

Sally Keeble: I am pleased to have a chance to speak briefly in this debate. I understand that the intention of this group of amendments is to probe, but it is important to get away from the loose discussion of means testing, because that could undermine the establishment of the new pensions regime and, more importantly, its role for many of my constituents for whom it will work very well indeed. It will be important in encouraging them to think about saving and making provision for themselves.
	I challenge the hon. Member for Eastbourne (Mr. Waterson) about the benefits he was including in the general category of means testing. We have all heard that term endlessly and we have all heard our constituents say that they do not particularly like means-tested benefits. When they say that, they mean particular aspects of the pension credit. By and large, the people who most dislike the means-testing of pension credit are those who are not entitled to receive it. I have never yet heard someone who is entitled to pension credit actually complain about the process for getting it. If we included all the other benefits to which old people might be entitled in the first place, we would strangle the personal accounts at birth, which would be a great shame. That would say to people that either they should rely on personal accounts and self-provision, or that they should be dependent on the state. The reality for many people is that it will be a combination of both.
	Many of my constituents will need both forms of provision, because many of them work part time. Others may work all the hours God sends, but they are not on very high wages. The personal accounts will work well for them, but in some instances they will need top-ups. Some of my constituents bought their council houses, and they will not need to worry about housing benefit, but those in rented accommodation will still need housing benefit. I think that they would regard that not as a means-tested benefit, but as part of the income package that they need to get by each month. The same applies to council tax credit and the various disability benefits and carer allowances that some people need to increase their income.

Nigel Waterson: I am following very closely what the hon. Lady is saying, but has she seen the figures produced by the Pensions Policy Institute? Unlike the DWP, it takes account of housing benefit in its projections of those who will benefit from personal accounts. The forecast shows that men with full national insurance records who rent in retirement will be in the high-risk category. Housing benefit will make a crucial difference for some people, and we cannot just ignore that by saying that personal accounts will be a jolly good thing for most. Factors such as that really must be taken into account.

Sally Keeble: I have not seen the PPI figures, although I shall certainly look at them. I asked the hon. Gentleman to tell me what he considered to be means-tested benefits, because I wanted to clarify his party's approach to them. The Opposition have more serious aspirations to government now, so theyand the Liberal Democratsmust say what they understand by the term means testing.
	Old people do not respond well to being told, This is good, but that is bad. You can have your personal accounts, but not the other benefits. Some of them will say, Well, I might be auto-enrolled into the scheme, but I am going to opt out. To get by, I need X, Y and Z, and this, that and the other. Thanks very much, but this savings stuff is not for me.
	It is important that we encourage people to make good self-provision, but we must also recognise that some people will need top-ups of various kinds. There is nothing shameful about that, as that is not means-testing: rather, it shows that the state is doing what it should dothat is, supporting people who make self-provision and making sure that people receive help according to their needs, with dignity and proper services in retirement.

Lynne Jones: I cannot agree that what my hon. Friend has described is not means-testing, although I accept that means-testing is very important and I would not want the incomes that very poor people receive to be reduced. I appreciate her opposition to the Conservative amendment, which is supposed to be a probing one, but what is her opinion of the Liberal Democrat proposal, which I think is very reasonable? It would merely ensure that information is provided to people so that they can decide whether personal provision through an auto-enrolment scheme is worth while.

Sally Keeble: I agree that the Liberal Democrats should also tell us what they mean by the phrase means-tested benefits, but the existing advice systems are supposed to be able to provide the information to which my hon. Friend refers. Independent financial advisers are supposed to give people advice on benefitsgoodness knows how!but, equally, advice is also supposed to be given to them by the agencies dispensing the benefits. Those arrangements are designed to ensure that people make decisions based on what is in their best financial interest. We should not label as means testing all state support that takes into account someone's personal finances. For instance, the carers allowance, or the carers or disability supplements to pension credit, are not examples of means testing: instead, they offerin a dignified and proper waysubstantial support so that people in retirement can have a decent standard of living.

Nigel Waterson: I am grateful to the hon. Lady for giving away again. She is being very generous, but does she agree that a proportion of people will always be better advised, for a variety of reasons, to opt out of personal accounts because their circumstances mean that they will not be any better off, in the long run? Does she also agree that that raises the conundrum, which has still to be sorted out, about the sort of advice people will get under what Lord Turner has called an advice-free model?

Sally Keeble: What the hon. Gentleman suggests is a bit like telling people on the welfare to work scheme that it is better for some of them to remain unemployed and simply live on benefits. We want a system that encourages people to provide for themselves, which means that we must show robust support for self-provision. However, we must also recognise that this is not an either/or choice, as people who make private provision will also need top-ups. We must not suggest that it is some kind of disgrace to apply for the other benefits, or that it is degrading to do so because of the implied element of means testing. What we have to do is provide support that is appropriate to need.

Danny Alexander: Will the hon. Lady give way?

Sally Keeble: I will, but then I must make progress, as I am not sure when this section of the debate is due to finish.

Danny Alexander: rose

Mr. Deputy Speaker: Order. The knife falls at 5.22 pm. Although I am loth to intervene at this stage, this is not a general debate about means testing and its wider ramifications; it is specifically about the Pensions Bill. I mention that so that it might concentrate Members' minds a little.

Danny Alexander: Thank you, Mr. Deputy Speaker.
	As the hon. Member for Northampton, North (Ms Keeble) knows, in the context of the Welfare Reform Bill, the Government have been considering how to make sure that it is worth people's while to go to work. The point of our amendment to the Pensions Bill is to ensure that objective information is provided both about the proportion of people in means testing, which includes pension credit, council tax benefit and housing benefit, and about the returns they are likely to receive, so that people can decide whether it is worth their while to save. Some people could be worse off if they chose a personal account, so it would be irresponsible to advise them to pay into one.

Sally Keeble: New clause 29 is specific, which is why I pursued the point about what a means-tested benefit is. Although I realise that it is a probing proposal, it states that the delivery authority would be wound up if
	in excess of 29 per cent. of the population over state pension age will, at the time of the introduction of personal accounts, be entitled to claim pension credit or another means-tested benefit,
	but it does not say which means-tested benefits. The hon. Gentleman says it would include council tax benefit and housing benefit, as well as other benefits, but we need some clear indication of what the Opposition are talking about. Is the aim of proposal to probe exactly what the Government and the Opposition mean by means-tested benefits?
	On a similar point, the hon. Gentleman that his party got things terribly wrong over the winter fuel allowance. They said, This is something extra, but we actually want just one payment. In fact, pensioners said, No, we want things that are appropriate to our needs, which is why they like the winter fuel allowance. It would be wrong to say that because many people need top-up benefits in one form of another we should not have personal accounts. The accounts are important because they will give people a personal entitlement. However, if people need top-up payments to give them a decent standard of living in retirement, with particular forms of support related to their personal circumstancesbe they carers, disabled or non-home ownersit is important that they can obtain that support.
	I am sure that my hon. Friend the Minister will say that we should not vote for the new clauseindeed, the hon. Member for Eastbourne may withdraw it. However, it is wrong for the Opposition to try to muddy the water and, in the process, make people worried about claiming the benefits they need to maintain their standard of living and to which they are fully entitled and the state is absolutely right to provide.

James Purnell: This has been an important debate, with good speeches from Members on both sides of the House. People will be watching it from outside this place, even if Members are not thronging to the Opposition Benches.

Nigel Waterson: Nor to yours.

James Purnell: Well, there are infinitely more Members on the Labour Benches.
	The amendments deal with the role and operation of the delivery authority and have allowed us to discuss important issues to which I will turn later in my speech. In their substance, however, they treat the delivery authority as though it would take decisions on personal accounts, whereas all that we are setting up under the Bill is an authority that can advise the Government so that the Government can take those decisions. Although I realise that these are probing amendments, on the issue of whether we should set objectives for such an advisory authority, it is quite clear that those objectives should be for Governmentexactly as the hon. Member for Eastbourne (Mr. Waterson) said in his introductory remarks.
	I want to turn to the points that the hon. Gentleman made. First, on amendment No. 3, he has slightly misunderstood the kind of guidance that we are talking about. As I said, the delivery authority is going to be advisory. It will support the Government in understanding the operational and commercial implications of policy options. It is therefore right that the Secretary of State is able to issue appropriate guidance from time to time, but a lot of that guidance is going to be fairly trivial. It will be on the format and presentation of the advice, and who should be consulted within the Department for Work and Pensions or other parts of Government. To specify that such ad hoc guidance must be subject to a length parliamentary process would impede the ability of the authority and the Secretary of State to move flexibly and quickly. Indeed, to suggest that for this initial short phase we should have a 40-day delay every time we want to issue guidance would be verging on the sclerotic and would be quite disproportionate. It is quite right that that advice should be given on a basis that people can look at. We want to make sure that we continue on the basis of the open and consultative process that we have had to date. But it would be a mistake for a formal relationship and formal commitments in relation to publication and consultation with Parliament to be included in the Bill.
	With respect to new clause 7, we agree with the spirit of what the hon. Gentleman is trying to do. As he was kind enough to say, he has, one might say, plagiarised

Nigel Waterson: Pillaged.

James Purnell: Pillaged, even. He has paid homage to the objectives that we set out in the White Paper. In formulating our policy, we are of course conscious of those long-term objectives, but I repeat that we are not setting up the personal accounts scheme through the Bill.

Nigel Waterson: If all that is true, why does the job description of the chief executive of the personal accounts delivery authority, which the Minister kindly sent to me, say that part of the chief executive's role is to
	Turn a strategic vision into a successful initiative
	and to
	Help evolve the business to meet its strategic objectives.
	Where is he to find that strategy?

James Purnell: The chief executive is to advise the Secretary of State on the decisions to make around that strategy. The objectives that the Secretary of State is following will bind the chair and chief executive of the delivery authority. That is quite clear. It is right in this phase for the objectives to bind the Government. When, subject to the will of Parliament, we have the opportunity to debate this matter in a further instance, we will be able to see exactly what those objectives are. I am sure that the hon. Gentleman and I will delight in talking about this matter in Committee, yet again, in what will be a sort of franchised version of Groundhog Day by then.
	We have finished our consultation on the White Paper, and it is important that we feed the responses into the development of the policy and that we respond appropriately to the people who have responded to our consultation. We are looking at the consultation responses and it would not be right to pre-empt that by setting objectives for the scheme before we have responded formally to the White Paper consultation.
	The hon. Gentleman will be glad to know that we are working with the Pensions Policy Institutehis favourite think-tankon a consultation event. I will be announcing another seminar to keep his diary occupied. He and Members on the Liberal Democrat Front Bench have been assiduous in attending these seminars.  [ Interruption. ] Yes, sometimes even more assiduous that the Government. We thank them yet again for the spirit in which they have engaged in this policy, as well as their indefatigability. As I said, we are creating another seminar for their delectation. The PPI will help us to debate the objectives for the scheme and how members' interests can be made central to it. We would be happy for hon. Members to take part in the discussion. Other hon. Members can come along too. I agree that it has been valuable to discuss whether we should have objectives, but I hope that the House will agree that actually setting objectives in this Bill would be getting ahead of ourselves.
	The hon. Member for Eastbourne mentioned the issue of levelling down and I would like to repeat my previous assurances that personal accounts will complement rather than compete with existing pension provision. There is no intentionthe hon. Gentleman asked for reassurance on thisto nationalise the pensions industry by the back door. Parts of the pensions industry work extremely well and we want to build on that. We also want to ensure that we can extend the benefits of those parts of the industry that are working well to the rest of the population in order to ensure, for example, that everyone has the chance to get a matching employer contribution.
	We believe that we have developed a package of proposals that will help us to achieve precisely that. They include a prohibition on transfers, a limit on contributions and a simple scheme exemption test. We hope that that will keep the scheme focused on our target market of low to moderate earners. We will continue to work with stakeholders on additional ways of achieving that.

Nigel Waterson: Is the Minister in a position to tell usin the light of our and other representations and the original recommendations of Lord Turner and his colleagueswhether he and the Secretary of State have reached a conclusion on the amount of the contribution cap?

James Purnell: The hon. Gentleman and I have spent so much time in each other's company that he can read my speech even from his sedentary position: that was precisely the issue to which I was about to come. As he knows, the level of the annual contribution is something on which we are consulting. As my right hon. Friend the Secretary of State has made clear, we are reconsidering the matter in the light of the responses. However, we want to look at those responses in the round.
	The hon. Gentleman will have received representations about the issue from his new-found friends, the Association of British Insurers, but representations have been made from a range of directions. The Engineering Employers Federation said that there should be no cap at all; the TUC, the Equal Opportunities Commission, Age Concern and other organisations backed the 5,000 limit; while others said that it should be 3,600 or 3,000. For once, I stayed rather longer than the hon. Gentleman at the seminar at the Scottish Widows event on Monday, so he will have missed hearing Jeannie Drake say that the Turner commission would be perfectly happy with the 5,000 figure.
	It is not a question, as some have claimed, of the Government being at odds with the Pensions Commission. The question is really how to achieve the twin goals of focusing the scheme on the target market while also allowing people to make extra contributions if they want. The Pensions Commission has always been very clear that the level of automatic enrolment is a minimum for people to contribute. We want to give enough headroom for people to be able to contribute above that and achieve a higher pension in retirement. We want to balance that with the aim that we have stuck to of targeting the scheme at the market. We will look in great detail at the responses to the White Paper and come back with proposals, which we will be happy to discuss with Opposition Front Benchers, to achieve that balance.
	I hope that I have answered the points raised in the debate about personal accounts and the scheme. The remainder of the debate has focused particularly on means-testing, so I would like to spend a few minutes on that subject. The argument about means-testing often sets up what I believe to be a false choice between whether we should or should not have means-testing. The truth is that all parties know that, whichever Government are in power and whatever scheme they come up with, there will always be a certain amount of means-testing. The question is therefore not whether there should or should not be means-testing, but what the right balance between universal benefits and means-tested benefits is and how fast we should taper away those means-tested benefits.
	I believe that the argument about means-testing is very simple. The argument that I shall seek to develop in the rest of my speech is that we are trying to give people the ability to provide for themselves in retirement and to be well above the level for means-tested benefit. The poverty prevention level or safety net will be there for people if their life does not work out as they hoped and they are not able to make sufficient provision for themselves in retirement.
	I also want to bust a couple of myths about means-testing, because the Opposition sometimes talk as though means-testing has exploded in the past few years. The truth is that the proportion of pensioners who claim means-tested benefits is far lower than in the past. Today, about a third of pensioner families claim means-tested benefits; in 1979, nearly two thirds did so. If our pension system has been affected by the level of means-testing, it should have been affected positively by the trends that have occurred. Indeed, the proportion of pensioner families who claim means-tested benefits has fallen since 1997. The question is not what that has done to saving today, but what we can do to encourage saving in the future. That is exactly what the Pensions Commission considered.
	It was never our intention to continue the current policy framework indefinitely. It was introduced to deal with a problem that we inheritedthe level of pensioner povertybut we recognise that, if it had continued indefinitely, as the hon. Member for Eastbourne said, almost 80 per cent. of pensioners would have been entitled to pension credit in 2050. That is exactly why we never intended to continue it for that length of time.

Nigel Waterson: The figure is going up.

James Purnell: No, the figure is not going up, exactly because of the Bill, but if that happened the vast majority of the generation starting work today, who would retire in 2050, would expect to be affected by means-testing once they reach retirement. The reforms recommended by the Pensions Commission and implemented by the Bill address that situation. They make the basic state pension and the state second pension more generous, so that individuals with a good contribution record will be able to retire on 135 a week from their basic state pension and state second pensionwell above the level of the pension creditand their private savings will come on top of that.

David Laws: If the PPI's higher estimates for means-testing were to prove correct and the Minister were to conclude that they were correct, would he be unhappy with that?

James Purnell: When the hon. Gentleman is Pensions Minister in 2050, or even in 2040 or 2030, he will be able to deal with that. We have clearly set out a set of policies that we want to make work. The reason why I am slightly reluctant to answer his questionsomething that he may have spottedis that it is a question of what the right balance to reduce poverty is. It is not about picking an abstract number out of thin air. For example, as was persuasively pointed out by my hon. Friend the Member for Northampton, North (Ms Keeble), the Front-Bench team could just say, We will get rid of council tax benefit and housing benefit. That would reduce means-testing in retirement by a huge proportion, but they would not want to do that because it would push people into poverty unjustifiably. Therefore, we should all aim to create a policy that delivers the right balance between universal benefits and means-tested benefits to ensure that people do not fall into unacceptable levels of poverty.
	People will be able to work or care for their whole lives to get to 135 a week, and the Bill will introduce that important change. People can get to that 135 through a full life of caring, and caring contributions will be put on the same footing as working contributionssomething that is extremely welcomebut their private savings will come on top of that. Many long-term savers in personal accounts can expect to get returns of at least 2 for every 1 initially invested by the individual.
	The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) asked whether we could give more definitive projections than that. We will publish further research on the issue, but we will not be able to give definitive projections to people because we cannot tell someone at the age of 22 what their working life will be, any more than we can tell them whether they will be disabled in retirement, whether they will be renting in retirement or, indeed, whether Government policy will have changed when they retire.
	The hon. Member for Eastbourne quoted the example of someone in rented accommodation. Would he really advise people in 2012 not to save when they are 22, because they thought that they might be renting and relying on council tax benefit or housing benefit in retirement? We have no way of knowing what the policy will be in 40 years' time. We can all seek together, through the Bill, to create a consensus, but I warn particularly Liberal Democrat Members about looking for a level of certainty that is so great that it makes the scheme impossible. If the Liberal Democrats want to sign up to automatic enrolment, as I believe that they do, they will have to accept that we will be giving people a reasonable understanding of their future, rather than a perfect 20:20 predictionno one could aim to do that.
	The large majority of people can expect a good return from personal accounts, but pension credit will provide a safety net of about 119 a week if things go wrong. The key aspect of the reforms is that someone starting off work after personal accounts come in will know that if they work or care for most of their working lives and pay into an account, they will retire on significantly more than the means-tested minimum.
	The Pensions Commission did not suggest eliminating means-testing and nor does any commentator or party in the House. Instead, there is a consensus that we should have a safety net to prevent unacceptable poverty in retirement, which is what pension credit becomes thanks to these reforms. The proportion of people entitled to pension credit will be reduced to less than 30 per cent. by 2050. There will thus be two main groups of people who will benefit from pension credit: those whose working lives did not turn out as they hoped and were not able to make contributions through working or caring to lift themselves above the means-tested level; and, just as importantlyand inconveniently for the policy of the Liberal Democratspeople who get more than 119 in retirement because they are disabled or caring for someone, or because they have other costs. We teased the hon. Member for Yeovil (Mr. Laws) in Committee to tell us whether he planned to take money away from that second group of people, but I assume that he will continue to duck the question, given that that issue is the fatal flaw in his proposal.
	We believe that our proposals strike the right balance between universal benefits and means-tested benefits. We are happy to consider any suggestions that Opposition Front Benchers might make, but in truth there are only two ways in which we could reduce the proportion of people on means-testing. The first way would be to increase the basic state pension to the standard minimum guarantee level of 119 a week, which is somewhere near the policy of the hon. Member for Yeovil. However, without making offsetting changes, that would cost 20 billion, or 5p on income tax. If it were not enough that such a policy would be unaffordable, it is worth noting that it would not get rid of means-testing. It would reduce means-testing by only about a quarter, so while 20 billion would be spent, the hon. Gentleman would still have to decide whether to support automatic enrolment because of, for example, the question of housing benefit, or the situation for people who got more in retirement because they were disabled. Perhaps he will tell us whether he would take money off the people whom we have been discussing for so long.

David Laws: Does the Minister agree that the more modestand certainly more affordablemeasure of bringing forward the timing of the introduction of the earnings link to next year from a vague date between 2012 and 2015 would, according to his figures, reduce means-testing by 5 per cent. by 2015?

James Purnell: My point is that whatever was done in the direction that the hon. Gentleman suggests, we would still have means-testing in the system. His proposal, which might end up being more modest than the one that I have read out, would cost 20 billion and increase income tax by 5p, but it would reduce the proportion of people on means-tested benefits in retirement by only a quarter. He knows very well that he would thus be in the same position on automatic enrolment. He wants to be able to say that he would increase the basic state pension, but he knows full well that that would not deal with the issue that he has identified.

Lynne Jones: My hon. Friend expresses the view that it would cost 20 billiona year, I presumeto bring the basic state pension up to the level of pension credit. Will he place in the House of Commons Library the calculations that he has used to derive that figure?

James Purnell: I will do so happily, provided that the hon. Member for Yeovil also tells us what he would do about the 80 per cent. of people who, in 2050, would be getting more than 119. If the hon. Gentleman wants to tell us what he would do about people who got more than that amount because of disability or carers premiums or their state second pensionif he wants to tell the public that his plan is to take that money away from themwe will be happy to put that information in the Library. We are very happy to put it in the Library anyway, but I was trying yet again, rather pathetically, to get the hon. Gentleman to tell us what his policy is.
	The other way to reduce means-testing, of course, is to take money off poor people. The Tories seem to be saying that they do not want to increase the basic state pension, but they want to reduce the level of means-testing. The only way they could do that is by taking money off poor people, and I do not think that that is what they are planning to do. I am happy to let the hon. Member for Eastbourne intervene on me if he wants to. If that really is the Tories' policy we are happy to debate it with them; otherwise, the House will have to conclude that they want to make a noise about means-testing in general, without having any proposal to change what the Government are doing. We are happy to have that debate. We think that our proposals strike the right balance between enabling people to save for themselves and providing a safety net for them to fall back ona safety net that has lifted 2 million people out of pensioner poverty since 1997.
	Amendment No. 7 would require the delivery authority to publish analysis of the interaction of means-testing with personal accounts as well as plans for the delivery of generic financial information. That would place an unnecessary extra pressure on the delivery authority in its initial stages by requiring it to carry out extensive and complex analysis in a short time and to duplicate some work already being undertaken in other areas. The Department for Work and Pensions and other experts will be providing much of the information that the hon. Members for Yeovil and for Inverness, Nairn, Badenoch and Strathspey are after. Indeed, we plan to invite them to a further series of seminars to discuss the information base over the next few decades.

David Laws: How many are there?

James Purnell: My officials have suggested a series of five seminars to which we could invite Front Benchers. I am happy to strike a bargain with the hon. Gentleman: if he wants to tell us how he is going to take money off disabled people and carers, we will invite him to all five seminars; otherwise, I propose to invite him to just two.
	We do not believe that it would be right to place that burden on the authority. We believe that it is right to have a proper information strategy and to look at what we can do to improve people's financial capability. We are working with Otto Thoreson and the Treasury on a study to research and design a national approach to generic financial advice, and rather than a false debate about means-testing, in which the House knows that what we are talking about is where that balance should be struck, we should have a real debate about how to make that generic information and advice work so that people can make informed decisions about their future.
	The debate has shown that personal accounts and automatic enrolment are of great interest to Members. Much of our debate has focused on the substance of personal accounts, and there will be opportunities to discuss that following our response to the White Paper, which will be published soon, and, subject to the will of Parliament, in legislation in the next Session. Rather than pre-empt that, I urge Members on both Front Benches not press their amendments and new clauses and instead to comfort themselves with the thought of the seminars that we will be holding between now and then so that they can table amendments in the next Session.

Nigel Waterson: If the Minister thinks that he can threaten me by upping the rate of seminars to which he is going to invite me, he is absolutely right. I am seminared out, and the prospect of no fewer than five on one small subset of the issues is more than flesh and blood can bear.
	I have already made it clear that new clause 29 is a probing new clause and it has served its purpose, up to a point. Amendment No. 3 is not sufficiently important to press to a Division. However, I feel strongly about new clause 7. The Minister ought to feel equally strongly about it because it is largely looted from the wording in his own White Paper, so I do not understand why there is a problem putting that in the Bill. We have concerns, and it is not just us; the industry shares those concerns, as I said in my speech. On that basis, I would like to press new clause 7 to a vote.

Question put, That the clause be read a Second time:
	 The House divided: Ayes 217, Noes 293.

Question accordingly negatived.

Madam Deputy Speaker: Order. I understand that a number of Members were unable to register their vote on this occasion due to a malfunctioning door. I am having that investigated so that it should not cause problems for any future Divisions.

Patrick McLoughlin: On a point of order, Madam Deputy Speaker. I appreciate your launching that investigation. Will you ensure that the results are relayed to the House, because there is no doubt that a lot of Members who wanted to take part in that Division were unable to do so, and we must ensure that such an occurrence does not happen again?

Madam Deputy Speaker: I fully understand the hon. Gentleman's point. We do not want such an event to happen again, and I have no problem whatsoever in informing the House of the results of the inquiry.

New Clause 28
	  
	Certification scheme for carers

'After section 23A of the SSCBA (inserted by section 3 of this Act) insert
	23B Contributions credits for relevant parents and carers: supplementary provisions
	The Secretary of State must, not later than 31st December 2007, make regulations providing for the certification by health and social care professionals of persons who
	(a) are engaged in caring for another person or persons for a minimum of 20 hours a week, and
	(b) are not otherwise recognised by regulations under section 23A.'. [Mr. Laws.]
	 Brought up, and read the First time.

David Laws: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss amendment No. 15, in clause 3, page 3, line 33, at end insert
	'(d) is in receipt of a certificate under section 23B.'.

David Laws: I am delighted that despite our necessarily long debates on some of the earlier amendments, we have reached new clause 28 and amendment No. 15, which stand in my name and those of my hon. Friends.
	Members who regularly attended our debates in Committee will recall that we had a debate that I suspect will be very similar to this one because it dealt with a very similar issue. The hon. Member for Northampton, North (Ms Keeble) raised issues to do with caring, as did my hon. Friend the Member for Solihull (Lorely Burt). It is recognised on both sides of the House that the Bill will benefit the position not only of many women but of many individuals who are carers because of the change that it makes to the national insurance contribution mechanismthe reduced number of yearsand the other changes that the Government are implementing in relation to carers credit. We welcome those reforms, which have also been widely welcomed by groups with an interest in the subject.
	Without going back over all the debate in Committee that is already on the record, it is widely appreciated that some 40,000 individuals who are caring for 20 hours or more a week will not be covered by the Government's carers credit because they are not caring for someone who is in receipt of constant attendance allowance or the middle or highest rate of the care components of disability living allowance. The various bodies that represent carersthe Equal Opportunities Commission and othershave set out a series of helpful examples, which we discussed in Committee, of individuals whom hon. Members of all parties would want to benefit from the carers credit, but are left out of the Bill.
	The hon. Member for Northampton, North also raised the matter in Committee and we tabled various amendments, which were designed to remedy the position by introducing a process of certification by health and social care professionals for individuals who are engaged in caring for another person or persons for a minimum of 20 hours a week or more. In one of the great triumphsperhaps the great triumphof the Committee stage for the Liberal Democrats, the Minister responded constructively to a debate that my hon. Friend the Member for Solihull initiated. He said that the Government were happy to explore certification and that they had various concerns about whether health professionals would have the expertise to quantify the hours of care, whether they would require payment, and how the new requirement on local authorities would fit into the overall Government approach to carers.
	The Minister helpfully undertook to discuss the matter with the Department of Health and report back before the end of the Bill's passage. The new clause and amendment give us an opportunity to check on the Minister's progress and ensure that he has moved swiftly to deliver the relatively firm undertaking. It gives him an opportunity to tell us what progress has been made between the Department for Work and Pensions and the Department of Health.
	The carers' organisations and the Equal Opportunities Commission, which represent a broad range of opinion, said that they support new clause 28 and that they would like the Government to press ahead on the matter. I hope that the debate will be brief and that we can get an update from the Government on their commitment. If the Minister responds positively, it will not be necessary to press the new clause.

Sally Keeble: I am pleased that it is possible to discuss the subject again and have another chance to press my hon. Friend the Minister. We want to ensure that the proposals are taken forward and that we get greater recognition for carers in the Bill.
	I have pressed my hon. Friend for some time on a range of carers' issues, but especially on proper recognition for the role of carers. The amendment deals with that. The Bill includes important proposals to improve carers' pension rights but the number and range of people who come within its scope are disappointing. We need to ensure that the work that all carers do, when it amounts to a full job, is properly recognised so that people do not lose out simply because their sort of caring does not tick every single box on the entitlement to carers credit sheet.
	There must be a process to ensure that we have a robust way in which to decide who should qualify for the credit. It will not help carers if the credit is cheapened by being provided too easily. As I have previously argued, it is important to conduct the assessment of the carer's work during the caring assessment, which the local authority undertakes. That would properly involve social services and health care professionals and would also rely on a robust decision-making process, which is conducted by the social services authority and rests with it rather than the health authority. I would hope that discussions on these issues will take place before any regulations are put in place. I feel that to introduce those regulations by the end of the year would be too soon, although I acknowledge that they have to be brought in within a year.
	In particular, I hope that the Minister will be able to comment now on the regard that the provisions will have for how the assessments are carried out. For example, those carrying out the assessment might look at the number of people being cared for, and at the type of disability involved. Rather than looking at just one or the other, however, they should be able to look at a complex situation in the round, to see exactly what the person is doing. For example, a woman might be looking after a number of neighbours, none of whom receives any of the qualifying benefits, and none of whom would be able to manage without her support. She would thereby be excluded from taking a job, but she should be able to benefit because of the type of care she is providing, and the range of conditions and the number of people involved.
	I would hope that such provision would include family members. For example, a woman might have a number of older children with a range of disabilities for whom she still cares. They might still need day-to-day care, but would not qualify for the types of benefit specified in the present legislation. I want to press my hon. Friend the Minister on this issue. It involves a range of issues about disability benefits and carers benefits, but this specific question regarding pensions is really important.
	This usually affects women, although I accept that it can involve men as well. Often, women who have spent their whole lives caring for people and been unable to go out to work as a result will have to go out to work after retirement because they do not have the appropriate pension entitlements and cannot get benefits. They have to find an income somehow, but just at the time when they should be looking for more support from the state, they have to go out to work. A small cost would achieve a massive gain for this vulnerable group of pensioners. They make a huge contribution to society and are completely entitled to our support in retirement. I hope that my hon. Friend will make clear his commitment to establishing a proper process and a robust certification procedure to ensure that these people and the service that they provide to people with disabilities and to the wider society are properly recognised in their retirement.

Andrew Selous: I will endeavour to be brief, as we do not have much time. New clause 28 and amendment No. 15 cover ground that was well covered by our deliberations on clause 3 in the Public Bill Committee. However, it is worth mentioning again the predicament of carers and the reasons why my hon. Friends and I are pleased to support the measures in the Bill that support them, some of which were in our 2005 manifesto.
	There are 6 million carers in the United Kingdom, one in five of whom give up employment to care and have gaps in their pension record as a result. Carers UK estimates that, by 2037, there could be as many as 9 million carersan increase of 3 million. The Government estimate that the effect of clause 3which new clause 28 and amendment No. 15 seek to amendwill be that, by 2010, an additional 120,000 carers who care for more than 20 hours a week will gain entitlement to the basic state pension, and that an additional 180,000 such carers will gain entitlement to the state second pension. As the hon. Member for Yeovil (Mr. Laws) has pointed out, that leaves 40,000 people who might not accrue rights to the basic state pension and 60,000 who might not accrue rights to the state second pension, if they do not have 30 qualifying years at pensionable age. It is odd that the Government have sought to base the eligibility criteria for carers' credits on the benefits of the person being cared for, rather than on the circumstances of the carer.
	In Committee, the Minister was big enough to say that the measure in the Bill was not perfect. He said:
	We are discussing the issue with the Department of Health and will report back before the end of the passage of the Bill.
	He also said
	extension of eligibility along these lines could be done under regulations made possible by the Bill as drafted. [Official Report, Pensions Public Bill Committee, 23 January 2007; c. 62.]
	We all wait eagerly to hear what the Minister will say now that he has had a chance to think about the matter further.
	The net cost per year of providing carers national insurance credit for those caring for more than 20 hours per week for people who are receiving attendance allowance, constant attendance allowance, or the middle or higher-rate care component of disability living allowance will be 800 million by 2050. That was revealed on 29 March in written answer 303 in the House of Lords, asked by Lady Hollis. The Government have already made a considerable financial commitment. Is there a maximum amount that the Government are prepared to spend per year on carers national insurance credit? Will the Minister also tell us, in as much detail as possible, how he proposes to widen the eligibility criteria for the credit?
	I hope that the answers to those questions will be given here rather than in another place, because I think that it would be a courtesy to this House to give us the information now.

Lorely Burt: I shall be extremely brief. We have heard some excellent speeches, and I do not want to duplicate what has been said by other Members, all of whom have spoken in favour of new clause 28.
	The principle is that carers credit is for the carer, not the person being cared for. Carers UK believes that a system of certification can be made to work, and that carers should not be punished for the inflexibility of the current system. As was explained by the hon. Member for Northampton, North (Ms Keeble), some people are not covered through no fault of their own. Someone caring for several people on the lower rate of disability living allowance, or a woman who looks after a schizophrenic husband who is not prepared to claim disability living allowance but needs constant care, cannot claim carers allowance, home responsibilities protection or carers national insurance credit .
	Many organisations recommend a system of accreditation, involving a standard form with a space for an approved professional to certify that a carer is working for 20 or more hours a week. In Committee, we had a fairly long discussion on whether a doctor would be an appropriate person. I think that appropriate people would be those who were involved with the disabled person and his or her carer at home, such as members of social services departments, local education authoritiesin the case of those with special educational needsand community mental health teams, or community nurses and other health professionals who are in constant contact with patient and carer.
	The Women's Pensions Network, which includes groups such as Age Concern, Help the Aged and the Equal Opportunities Campaign, agrees that justice is needed for the people affected by the present system40,000 according to Carers UK, although the EOC estimates that the number is closer to 50,000. In fact, it is not merely a question of the number of people affected; it is a question of justice for those who have fallen through the net of an inflexible framework. The Minister has kindly said that he is prepared to reflect seriously on the possibility of encapsulating those deserving individuals in the framework, and we await the outcome of his reflections with bated breath.

James Purnell: It is good to end the Report stage on a similar consensual note to that which characterised most of our Committee proceedings. In the brief amount of time that is available I will try to respond positively to this group of amendments and to the campaigning of my hon. Friend the Member for Northampton, North (Ms Keeble).
	New clause 28 and amendment No. 15 introduce a new regulation-making power that would be used to extend the carers credit to those certified as engaged in at least 20 hours of caring a week by health or social care professionals. There has been an attempt to encapsulate the spirit of some of my remarks in Committee, and it is therefore unsurprising that we are sympathetic to the intention behind the amendments. The amendments are, however, not strictly necessary. The regulation power under the Bill is drawn widely enough to allow us to include people engaged in caring. We therefore would not need to introduce further legislation to put into practice the intention of these amendments.
	As I said in Committee, our plan is that in order to be eligible for the carers credit people would have to self-certify. There is no perfect way of doing that: the hon. Member for South-West Bedfordshire (Andrew Selous) said that it was not a perfect measure, but there is no perfect measure. We are trying to avoid the carer having to have a time sheet and therefore we want to have a self-certification process, but we need a lock in the system which is why they will have to identify someone for whom they are caring, and we say that that should be someone in receipt of attendance allowance, the highest or middle rate of disability living allowance or constant attendance allowance.
	The hon. Member for South-West Bedfordshire asked how much we are prepared to spend on this. We are prepared to spendand have costed inenough to get to that population whose hours are above 20 a week but who are not building up a full state pension. Everybody shares the goal of enabling those 40,000 people to qualify for the basic state pension and, more importantly, for their state second pension, and the intention is to do exactly that. I hope that that gives the hon. Gentleman the reassurance that he needs. This is not a question of finance; it is a question of trying to find a way of getting people to self-certify and to get the qualification that they need.
	Committee members will recall our discussion on this subject and particularly the heartfelt and persuasive speech of my hon. Friend the Member for Northampton, North, who has campaigned on it assiduously and passionately.

David Laws: And my hon. Friend the Member for Solihull (Lorely Burt).

James Purnell: Indeed, I also pay tribute to the hon. Lady, who made a persuasive speech, too, and who joined in the consensus in our discussion.
	I am pleased to be able to announce that we will explore how health and social care professionals might be involved in certifying that someone is caring for at least 20 hours a week through the review of the 1999 national carers strategy, and that we will report back before the end of the year. We are committed to doing that; it is not a question of whether this can be done, but of how.

Andrew Selous: In Committee, the Minister kindly said that he would report back before the end of the passage of the Bill through both Houses of Parliament, but he has now said that he will do so before the end of the year. Will he clarify that difference?

James Purnell: I am reporting now and saying that we are committed to doing that. The way to do it is through the carers strategy review, which will report by the end of the year. The Under-Secretary of State for Health, my hon. Friend the Member for Bury, South (Mr. Lewis), has announced that. It is the right forum. Our commitment to doing this is absolutely clear. We are happy to work with the hon. Member for Solihull and with other Liberal Democrats and the Conservative party, as well as with Carers UK and the Equal Opportunities Commission, on exactly how it can be done, but this is the right way to fill what is just a small gap in the provisions that we have put forward. Everybody shares the same goal. The review will be published before the end of the year. What this will do is put in place the final building block of our carers' strategy to ensure that people can build up a full state pension and a state second pension through caring contributions. Our proposals to reduce the number of qualifying years to 30 will make the major difference, but the carers credit is an important part of putting the roof on the policy, to use the earlier analogy.

David Laws: I beg to ask leave to withdraw the motion.
	 Motion and clause, by leave, withdrawn.

Kate Hoey: On a point of order, Madam Deputy Speaker. Can you advise us of any way in which we might be able to vote on the amendments on the uprating of state pensions? That is an incredibly important issue for pensioners throughout the country and they will be amazed that we have not had a vote on it during the entire debate on the Bill.

Madam Deputy Speaker: I understand the concerns of the hon. Lady, but I have to be guided by the terms of the programme motion as decided by the House. I am afraid that there is no provision for such a vote.
	Following the inquiries that were made about the difficulties that Members had in voting in the last Division, I am advised that a door on the estate was malfunctioning. A police officer is now standing by that door so that in the event that any more votes take place this evening, Members will be able to gain access. Efforts will be made to repair the door by tomorrow.
	 Order for Third Reading read.[Queen's Consent, on behalf of the Crown, signified.]

James Purnell: I beg to move, That the Bill be now read the Third time.
	The Bill implements the most ambitious reform of our pensions system in modern times. It provides the basis for a sustainable and affordable system that strikes a new balance between the responsibility that Government have for retirement and the responsibility of individuals and their employers. It addresses past inequalities and inadequacies, and embeds in our pensions system the crucial values of fairness and simplicity. Above all, it is based on the foundation of consensus. We have an opportunity to send out a signal to people listening to this debate and reading it in the future that the Bill received a Third Reading on the basis of consensus and agreement on the direction of travel in our pension system and, in particular, on giving people who are putting their money away for the future greater certainty that the system will endure and can be relied on.
	I wish to take this opportunity to thank the many individuals and organisations who have played their part in the Bill's passage. I particularly thank all the members of the Committee for their good humour and dedication to our proceedings. I also wish to thank the two Chairmen who presided over the proceedings. Of course, I thank my right hon. Friend the Secretary of State for Work and Pensions for his support, and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt), who led on many clauses in Committee. I also wish to put on record my appreciationI am sure that it is shared by all my hon. Friendsof my predecessor, my right hon. Friend the Chief Secretary, who played an important part in the early formulation of the Bill. On a personal note, I particularly wish to thank my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks), whose support and wise advice throughout the Bill's passage has been invaluable. Finally, I wish to thank the Bill team, which has done a fantastic job, and all those in my Department who have worked on the Bill.
	What will the Bill do? It comes after 10 years of progress in reducing the poverty that we inherited and that had all too often become associated with old age. Since 1997, 1 million pensioners have escaped from relative poverty, and more than 2 million from absolute poverty. We are spending more than 10 billionor about 1 per cent. of gross domestic productmore on pensioners than we would have had we continued the policies that we inherited in 1997.
	As a result, pensioners' incomes have grown roughly in line with those of people in work. In effect, they have tracked earnings over the past 10 years. For the first time in a generation, therefore, pensioners are less likely to be poor than other groups in society, even though they are not in work and even though people who are in work benefit from increases in earnings. That is a remarkable achievement.
	Earlier this afternoon, the hon. Member for Eastbourne (Mr. Waterson) said that means-testing was a cancer. I do not agree: on the contrary, it is the generosity of the pension credit system that has enabled us to achieve such an improvement. It must be accepted that mechanisms such as the pension credit system must be introduced if we are to reduce poverty. After all, that is why the Conservative party has supported the uprating of pension credit in line with earnings that will be guaranteed by this Bill.
	The Government have an ambitious vision, and it is one that makes a clear break with the past. Conservative and Labour Governments in the 1980s and 1990s pursued a voluntary approach to retirement provision. I am not trying to score any political points, but the link between earnings and the basic state pension was broken in the early 1980s and, for many years, peopleincluding people in the Labour movementcampaigned for its restoration. However, that was resisted by both the Conservative and Labour parties, because it was not possible to make a formal commitment to a long-term link between earnings and the basic state pension without making clear how that could be afforded. There would have been no point in talking about plans to restore the link if it was not possible to tell pensioners how that would be done.
	It is the hard choice at the heart of the Bill that will make the Government's approach affordable. Because we have raised the state pension age, we know that it will now be possible formally to restore the link between earnings and pensions, in a way that is both sustainable and affordable. Moreover, we will not place an unfair tax burden on our children and grandchildren as we arrange a more generous retirement for ourselves.

Mark Pritchard: Today has been very enlightening, and I am pleased that the Bill has reached this stage. However, I hope that the Minister will answer a question that I have raised many times. The Government have introduced a new 30-year qualifying rule for the basic state pension, but about 2 million people have come here from other parts of Europe since 1997. The Secretary of State has said that migrants who do not qualify under the new rule will have their pensions topped up through pension credit. Has there been any calculation of the size of that bill, which I believe will be significant?

James Purnell: I answered that question in Committee. The hon. Gentleman knows perfectly well that there are reciprocal rules between different parts of the EU. Acceptance of those rules is a definition of EU membership, and I regret that the hon. Gentleman continues to raise that question. I should be interested to know why he does so, but it is possible that he would prefer the UK to withdraw from the EU, even though that would mean that our citizens could not benefit from the ability to move freely around it. In fact, apart from that intervention, I believe that the Bill has achieved a fairly good consensus, and that is something that we want to develop.
	The Bill marks the most significant move towards equality between men and women since Barbara Castle introduced home responsibilities protection in the 1970s. It ends the inequality between men and women in the state pension by putting working and caring contributions on the same basis. Today, only about 30 per cent. of women retire on a full state pensiona staggering figurecompared with about 90 per cent. of men. That is completely unjustifiable and we will put it right through the Bill.
	The Bill is a comprehensive, integrated package of reform, but it has involved difficult decisions for the Government, business, individuals and the pensions industry. Its progress shows that our reforms have been broadly endorsed by all those groups, which is a real credit to the work of the Pensions Commission and, once again, I congratulate the commission on a report that is a model of its kind. It internalised the trade-offs involved and produced a package that put political parties and stakeholders in a situation where they had to decide not whether to cherry-pick this or that proposal but whether to back the measure as a whole. I congratulate the stakeholders and the other political parties on their approach to the debate.
	In pensions, consensus is not just nice to have; it is necessary as an essential component of an effective policy. People do not want to put their money away for 20, 30 or 40 years on the basis either of uncertainty about what the system will be or of constant changes. That will make them less likely to save. Through the consensus that we have developed as part of the Bill we will provide them with greater certainty, and it is a real achievement that the Bill is placed to deliver that. That is why consensus is so important. We cannot remove risk from pensions saving entirely, nor can we halt demographic shift, but we can and should remove the risk of political instability.
	We welcome Conservative support and we shall continue our discussions over the next few years. I look forward to the speech of the hon. Member for Eastbourne (Mr. Waterson) because I am still not quite clear what Conservative policy is on the earnings link, although we had some discussion of it in Committee. His colleague the hon. Member for Runnymede and Weybridge (Mr. Hammond)in fact, his bosssaid on Second Reading that he thought
	restoring the earnings link to provide that stability is affordable now.[ Official Report, 16 January 2007; Vol. 455, c. 673.]
	However, when that point was put to the hon. Member for Eastbourne in Committee, he replied:
	I have said, am saying and will continue to say that it is not our policy. [Official Report, Pensions Public Bill Committee, 30 January 2007; c. 165.]
	Having complimented the hon. Gentleman on his assiduousness in attending seminars, I ask only that he tell us whether the Conservatives think they can restore the earnings link, whether they want to do it on the same timetable as us and, if so, given their third fiscal rule and the fact that restoring the link will mean increased public spending, what else will they cut to fund it? I look forward to the answers, because it is important that we have not just consensus in theory but fully costed consensus in practice.
	I finish by paying tribute to my hon. Friends the Members for Northampton, North (Ms Keeble) and for Burton (Mrs. Dean) who pushed us to make further changes to the Bill to recognise the crucial role of carers. I am sure that all Members share the fundamental belief that pensioners are entitled to security and dignity in retirement. The Bill provides a solid platform so that people can save; it will give them the ability to build up a pension of 135 a week, which is well above means-tested level, either by caring or working throughout their lives. It puts in place the first stepping stones for the delivery authority andperhaps most importantit introduces real equality in the state pension system and I commend it to the House.

Nigel Waterson: I am always on tenterhooks when the Minister talks about consensus, because I never know whether the bouquet of flowers he is proffering conceals a water pistol. He cannot resist those little political digs, but we will deal with them later on.
	I join the Minister in thanking all the members of the Committee, in particular the two Chairmen who served us so well, the officials, the police, the  Hansard reporters and everybody involvedsome of the Bill team have become old friends. No doubt we shall all meet again in a few months' time, unless I am sacked or reshuffled[Hon. Members: Never.] I thank my hon. Friends for that. We are always pleased to know that another pensions Bill is just around the corner, but as we bid farewell, for the time being anyway, to this Bill, I think that it is a pity that owing to pressure of time today some important issues have not been debated fully or indeed at all. No doubt their lordships will help to remedy that.
	I shall not be inviting my right hon. and hon. Friends to vote against Third Reading. I hope that that does not produce an exodus from the Chamber on the Government Benches. We did not vote against Second Reading either. From the start of the Billand even before it was introducedwe in the official Opposition have taken a thoroughly responsible attitude and worked hard to try to forge a long-term cross-party consensus on pensions reform. At times it has been tough, but we have continued to try. I am still entirely unclear whether the Liberal Democrats are part of that consensus, or part of a parallel consensus that is going on somewhere else and that neither we nor the Government seem to be involved in.
	It is right to say again that, as the Minister indicated, we support the basic direction of travel that the Government are setting out. In our last election manifesto, we promised to restore the link between the basic state pension and earnings and set out how that would be paid for. We also promised to tackle the gross unfairnessas the Minister has saidof a situation in which less than a third of women receive the full state pension. It would be the height of churlishness to oppose the measures simply because they have been proposed by another party, but we do have concerns.
	As Joe Harris of the National Pensioners Convention said,
	3 million older people will have died before ministers restore the link with earnings.
	It still puzzles me why something that might not be affordable in 2012 will definitely be affordable by 2015. The Minister tried to explain that to me on a number of occasions in Committee, but either I am even more obtuse than I thought or there simply is not an answer to that conundrum. I wonder whether the Minister would mind trying his luck again if he gets another chance in this debate.
	The Minister returned to the canard that we heard in Committee about what my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) said. I think that I made it clear in Committee, but for the sake of complete clarity, I repeat that my hon. Friend was saying that the decision about affordability could be made now. He was wondering why the Government could not make that decision. We also remain concerned about the cliff edge for some women pensioners and we remain concerned that many women already retired or soon to retire will see little or no benefit. The issues surrounding carers have been eloquently argued both here and in Committee by my hon. Friend the Member for South-West Bedfordshire (Andrew Selous). It is perhaps a shame that he did not have the opportunity this evening to develop those arguments more fully.

James Purnell: I want to draw the hon. Gentleman's attention to  Hansard. His colleague did not say that he thought that the decision could be taken now. He said:
	We believe, however, that restoring the earnings link to provide that stability is affordable now.[ Official Report, 16 January 2007; Vol. 455, c. 673.]
	That could not be clearer. I know that the hon. Gentleman has tried to correct that. All I am trying to do is point out that, when it comes to policy, every now and then the Conservatives are not quite clear about how they would fund their proposals.

Nigel Waterson: The Minister has referred to Groundhog Day at least once this evening. We could go on having this discussion till kingdom come, but it is not going to change anything. I have made clear more than once what my hon. Friend intended by those words and I cannot add or subtract anything to or from that.
	I was talking about carers and the excellent work done on the Bill by my hon. Friend the Member for South-West Bedfordshire. We also broadly support the gradual increase in the state pension age, but we recognise that there is much more to be done in relation to flexible working and retraining for older workers. We have given our broad support to the proposals for personal accounts, but, again, as I explained to some extent in relation to one of the groups of amendments earlier today, we still have serious concerns about the design of the new system and the extent to which we should include in this Bill, rather than the next Bill, the basic parameters of success or failure for the system for personal accounts.
	On Second Reading, I flagged up four major concerns about personal accounts: means testing, the risk of levelling down, the potential for mis-selling, and the issue of confidence. Those concerns still exist. I do not want to develop in any more detail than I have already today the issue of means testing. The Minister and the Pensions Policy Institute will just have to agree to disagreewithout being disagreeable about it. They are never going to reach a consensus, and the more the Minister tried to explain his way out of that problem, the more he seemed to say that nobody can ever really know, so we are boldly taking a step into utter darkness with no way of knowing what will happen. The only thing we can say with certainty is that by 2040 or 2050, none of us will still be developing these arguments. Having said that, one of my constituents is 110, so perhaps there is hope for all of us.

Michael Fabricant: It is because of his excellent MP!

Nigel Waterson: I hear my hon. Friend's sedentary comment, but I take no credit for my constituent being 110, apart from the fact that he is claiming the benefits to which he is entitledor not, as the case may be!
	I would like to spend a few minutes talking about levelling down, which is still a major concern. The law of unintended consequences is, like the word Blackpool through a stick of rockvery much part of pensions legislation. We certainly saw it at work with the Pensions Act 2004. There are real concerns in the industry that the advent of personal accounts will bring about a levelling down and that finance directors will, as I said earlier, take a quick, sharp look at the extra cost caused by the extra participation introduced by auto-enrolment and suggest to their employees that they might be better served by going through the personal accounts system.
	As the deputy director general of the Association of British Insurers, Mr. Stephen Sklaroff, said a little while ago:
	We hope the Government is not deliberately trying to fix the system so more money flows into personal accounts so it can keep down costs to artificially low levels.
	He then spoke about raising the contribution cap, which he said was
	completely inconsistent with earlier pledges to target people on lower incomes. Our industry cannot be forced to compete with a subsidised system.
	I developed arguments about the contribution cap earlier today and I am afraid to say that I did not find the Minister's remarks about it particularly reassuring, so we shall watch what develops.
	There is some potential for mis-selling. Ministers love to go on about previous mis-selling scandals, but the issue very much remains in respect of people auto-enrolled into personal accounts who would actually be well advised to opt out. I am thinking of people on low incomes with high credit card debts. In my intervention on the hon. Member for Northampton, North (Ms Keeble), I referred to the excellent work of the PPI on risk categories. It looked at two distinct agespeople aged 40 and 25 in 2012and examined categories where people are at risk, meaning that they are unlikely to receive back the value of their individual contributions to personal accounts. That is a real concern that needs to be looked at further, not only as part of the Thoresen review, but more generally.
	I conclude by talking about confidence. When the Government are proposing to launch a brand new pensions system designed to appeal to 7 million, 8 million, 9 million or perhaps 10 million people who are currently not saving for their retirement, it really beggars belief that Ministers are so blind to the danger to confidence posed by existing problems in the system. How can we expect younger workers to save for their retirement when almost every week they see bad news stories about people who have lost their pensions? How can the Minister talk about sending a signal from this House based on consensus when the actual signal we have sent today is that we are not prepared to give proper help to the 125,000 people who have lost their pensions? The Minister should be in no doubt that that is indeed the signal that we have sent out.
	Yesterday, the Chancellor was finally cornered in this Chamber over his raid on pension funds. Was he embarrassed, abashed, apologetic? Not a bit of it. He said:
	I tell the House that I do not apologise,
	and he went on to say:
	We made the right decision.[ Official Report, 17 April 2007; Vol. 459, c. 176-183.]
	Tell that to the 125,000 people who have lost their pensions. They are the most salient issue today. We must not forget that everyone in the country with a pension scheme has lost out to some extent, because of the 100 billion that the Chancellor has sucked out of the retirement savings system. It is a cause for genuine regret that Labour Members were whipped to vote down a package of help for those people that was sensible, deliverable and fairone based on the sort of cross-party consensus that the Minister liked to talk about in his speech. Having created the problem, the Chancellor is happy to leave them without help or to the tender mercies of the failed financial assistance scheme.
	I shall interrupt the Minister's private conversation for a moment by reminding him that he suggested earlier in our debatesor, indeed, it might have been the Secretary of Statethat the Government came forward initially with plans to produce the financial assistance scheme and that the Government were the ones on the front foot in trying to improve these matters. The fact is that, on 14 May 2004, the Government were forced to produce in a hurry their proposals for the FAS, with a price tag of 400 million that had no basis in fact or research at the time, because they were facing defeat in the Housea defeat based on our opposition and that of the Liberal Democrats, other parties and a large number of Labour rebels.
	The hon. Member for Yeovil (Mr. Laws) pointed out earlier in our debates that, at every point, the Government have been dragged here kicking and screaming to put in a bit of extra money or to make some concessions. How long will it take before they make the final concessions that justice demands? They have been told on no fewer than four separate occasionsby the ombudsman, by the European Court, by the Select Committee and by the High Courtthat there has been maladministration, but their reaction is that everybody else is wrong and that they are right, and they are even appealing the High Court decision. They are still ignoring the legitimate demands of the pension victims, but even this Government should not have ignored the voice of the House. Those Labour Members with constituents facing penury who failed to support the cross-party package this evening must answer to their own consciences and to their own constituents.
	As I have said, the Chancellor claims that he would do the same again, but the circumstances that surround the decision in 1997 throw a penetrating shaft of light on to the Chancellor's real thoughts on the matter. Courtesy of the former Paymaster General, we now know that this policy was created in conditions of the utmost secrecy. It was hidden from the British public during the 1997 election campaign, when the Labour party had the effrontery to make a centrepiece of its campaign our pensions policy, while its policy was firmly locked in a safe at the Grosvenor House hotel. It was then acted on in the teeth of advice to the contrary from civil servants and the CBI, among others. But most telling of all, the Chancellor fought for two long, bitter years to resist the freedom of information request from  The Times. Finally, the information was slipped out on a Friday, when the House had risen for the Easter recess. Is it not incredible that, yesterday, when questioned by my hon. Friend the Member for Bromsgrove (Miss Kirkbride)

Madam Deputy Speaker: Order. The hon. Gentleman is now going rather wide of the Bill that is under discussion today.

Nigel Waterson: I am coming to the end of my remarks, Madam Deputy Speaker, but it is important that the whole House is aware of the umbilical connection between the decision to raid pension funds to the tune of 100 billion over the past 10 years and the fact that so many people are now looking at a pension that is a fraction of what they expected. Perhaps the most grotesque sight in yesterday's debate was that of the Secretary of State trying to

Madam Deputy Speaker: Order. I remind the hon. Gentleman again that we are not having a rerun of yesterday's debate; we have a Bill currently under discussion.

Nigel Waterson: The bottom line is this: the official Opposition support the direction of travel of these reforms, although we have worries about some of the technical details and aspects of the personal accounts on which I have touched. However, fundamentally, we need to restore confidence in the pensions system as a whole. The man in the saloon bar who is not saving for his retirement, yet should be, needs to have confidence that when he locks his money away for 40 years, it will still be there at the end of that time to provide him with a decent pension. Ministers need to go back to the drawing board and address the way in which the problems that I have touched on are dealt with so that we can clear the ground and the personal accounts system can have the best possible start in life, instead of being encumbered by the baggage of recent history. Having said that, we wish the Bill a safe passage to the Lords and look forward to it coming back in due course in an improved form.

Lynne Jones: It is understandable that the financial assistance scheme and the way in which we might help those who have been cheated of their pensions have dominated today's proceedings. I certainly hope that the Government will come back with proposals that are more generous than those on offer. However, the Bill should be setting a solid foundation for the next 50 or so years, so it is most unfortunate that there has been such little time to debate some of its fundamental aspects. I was disappointed that all the concerns that I raised on Second Reading were not addressed in Committee and that they were not even discussed, let alone voted on, on Report. Although there are many welcome provisions in the Bill, especially those relating to pensions for women, I cannot see how the Bill, as it stands, will be a firm foundation for the future.
	My hon. Friend the Minister mentioned Barbara Castle. I am sure that she would have welcomed the provisions for women in the Bill, but I do not think that she would have been proud of the continuation of the means-testing that is still inherent in our pension system and the disincentives for people to save so that they can provide better for themselves than the state can do. Although it is good that the Government have accepted the recommendation of restoring the link to earnings, it will be some time before that happy event takes place. In the meantime, the disparity between the basic state pension and the means-tested pension credit will continue to grow, not narrow. That will mean that more people will be subject to means-testing, which will be counter-productive to our fundamental aims. Sadly, many people will thus be automatically enrolled into the new pension scheme when they would be better off using their money in other ways to save for their future.
	It is unfortunate that we have not been able to have an adequate debate. I ask the Government to bear that in mind when they set out in future the arrangements for the Report stage of such complex and important legislation. For obvious reasons, the Minister talks about affordability when addressing the aim of reducing means-testing and improving the basic state pension. However, we have not been able to debate today the amount of taxpayers' money that is spent on tax relief and the fact that the majority of that money goes to the 5 per cent. of people in our society who are the most wealthy.
	We are shortly to have a new Prime Minister. I hope that this is an issue to which the Government will want to return, because if we are really concerned about creating a fair society and encouraging people to do more for themselves, we have to address it. We have to look at ways of ensuring that more resources are directed to those on lower incomes. If that means taking money away from those on higher incomes who have the ability to provide for their old age without substantial largesse from the taxpayer, that is something that a Labour Government should want to do.
	I remain dissatisfied with the Bill, and I hope that there will be an opportunity in the other place to improve on it. I hope that I will be able to be more enthusiastic in supporting it when it comes back to this House.

Michael Weir: I want to make a few brief points. Looking at the ePolitix briefing for the debate, I see that it lists all those who contributed on Second Reading and notes that I was the only one who voiced any real concerns about the Bill.
	Some of those concerns remain. There have been improvements, and I genuinely welcome what the Minister said today about those who are the victims of solvent employer pension schemes that have been wound up. I hope that that will help my constituents in the J  D Wilkie scheme in Kirriemuir to which I referred earlier. It is a regret that we did not have today the exact wording of the Minister's proposals. That would have been useful because we could all have gone away a little more certain about what is to be done.
	I share many of the reservations of the hon. Member for Birmingham, Selly Oak (Lynne Jones) and voiced similar concerns on Second Reading. One thing about which I am seriously concerned is the raising of the state pension age. I appreciate that that is some years away, but there are grave difficulties with the proposal because of the use of averages. As I said on Second Reading, the difference in life expectancy between and within areas means that there is a danger that many people will never get the benefit of their pension. In Glasgow, for example, many people have a life expectancy of less than 70 years. There has been much debate about the reasons for that and the improvements in health and housing that may make a difference. However, there are still huge discrepancies in life expectancy in different parts of the country and even within areas, and that will prove problematic in future. If, as the pension age increases, it turns out that many people are not getting the benefit of their pension, that problem will come back and hit us.
	This is a curate's egg of a Bill. There are bits that I can wholeheartedly support. There are bits about which I have grave concerns. I will not oppose it, obviously, but my concerns remain. I look forward to seeing what happens when the Bill goes to another place. It leaves here slightly improved, but still with measures that cause concern.

David Laws: I should like to start on three points of consensus, and I shall try to be brief as other Members still want to speak. First, I echo the Minister's comments in passing on our thanks to those people who have been involved in supporting the Bill through its various stages: the officials in his Department, those who advise us and the lobby groups who sometimes see their ideas and even their words taken up in the debates. We are grateful for all of that.
	We would also like to thank the Minister for the very reasonable way in which he conducted himself throughout the Committee stage and for the fact that he tried, on the whole, to answer our questions. We can only wonder what future there is for a person who displays such qualities in the Government that we are about to get. We wish him all the best with that.
	Perhaps more importantly, we add our congratulations to those of the Minister on the work of the Pensions Commission. It is worth bearing in mind that none of the big measures in the Bill was included in its entirety in the manifesto of any of the four main parties before the last general election. To succeed within a very limited period in proposing a coherent package of reforms and persuading not only the Government, but both main Opposition parties and some of the other groups represented in the House, to accept it is a major achievement. I hope that many of those reforms will last and influence the shape of the pensions system for many years to come. I think in particular of the restoration of the earnings link, the increase in the state pension age, auto-enrolment and the other changes to the pensions contributory system. There is a great deal of consensus on those measures and on the direction of travel, which is why we, too, do not intend to divide the House on Third Reading.
	Earlier, the hon. Member for Eastbourne (Mr. Waterson) teased me about whether there was a parallel consensus, which only the Liberal Democrats were part of and which could exist alongside the apparent universal consensus on the Pensions Commission's proposals. In fact, there is. I put it to him that if he went to every saloon bar and village hall in the country and held a public meeting on pensions, he would find that there is indeed a parallel consensus on three points. It is perfectly possible to hold both the existing consensus and the parallel consensus in one's mind at the same time. The hon. Member for Birmingham, Selly Oak described the elements of the parallel consensus in her comments. As the hon. Member for Eastbourne will recognise as I describe them, the elements of that consensus are threefold.
	First, the Government have said that there is a great degree of certainty about the reforms. In their response to the Committee on Work and Pensions, they said:
	There is no ambiguity around this commitment
	for example, in respect of the earnings link. However, that comes as news to many people in this country and in this House who feel that there is a great degree of uncertainty, not least about the arbitrary way in which the earnings link is to be restored, which has created uncertainty and will increase the amount of means-testing in the meantime. There is no guarantee that the state pension will be uprated by the greater of the increases in prices and earningsthe Labour party has dropped its commitment to that. More seriously, there is not even a commitment in the Bill to uprate pensions by a measurable and defined index, which the Engineering Employers Federation has said gives the Secretary of State almost carte blanche to determine the way in which the uprating takes place. That is worrying for all of us, because none of us knows which party will be in government in the future or how they might decide to reinterpret some of the changes made though the Bill. In a nutshell, if one goes to any pensioners' group in the country, one will find a parallel consensus on dissatisfaction with the uncertainty and the long time before the changes take effect. That is why although all of us here may be pleased about the pensions consensus, people in the rest of the country are not.
	Secondly, because the restoration of the earnings link is being delayed and because, as the hon. Member for Birmingham, Selly Oak said, we are building on such a low foundation of the basic state pensionbecause the Chancellor has insisted that pensions reform take place in an environment where for 10 years we will not increase the share of GDP that goes to state pensionswe have an enormous amount of means-testing. In the short time left I shall not repeat the entire debate, but today I was interested to hear even the Minister start to moderate his claims about the number of people who will benefit from personal accounts. On Second Reading, the Secretary of State said that the vast majority of people would gain more than 2 for every 1 invested, but today we have been told that a good majority of people will be net gainersin other words, the claims are being scaled back.
	The Government have not yet been able to answer the point, so I continue to believe that half the target audience for the personal accountpeople on lower incomes, whose risk of becoming subject to means-testing is greater than it is for the rest of the populationcould be subject to means-testing in 2020, 2030 or 2040. A large number of people might find either that the 2 for 1 no-brainer offer that Adair Turner and his commission tried to deliver is not realised for them, or thatworse stillthey fall into the small but not negligible category of people who will actually lose by investing in a personal account because of the effect of means-testing not only on the pension credit, but on housing benefit.
	The Government's problem is that the more they deal with the mis-selling problem by not auto-enrolling various groups for personal accounts, or by not making sure that those groups get generic advice, the more they displace the mis-selling problem and make it a take-up problem, in which lots of people who should have personal accounts do not. The Government have yet really to deal with that problem. Some of us have concerns that the Government are building on an unsound foundation. If we are right about those concerns, the personal account part of the package, which we will hear about later this year, could be a failure, and if it is it will pull the rug from under a lot of the reforms, and that will affect what is delivered.
	The final point on the parallel consensus is that people recognise that there are some huge issues with which the Government have not yet dealt. The hon. Member for Eastbourne touched on our disappointment today about pension compensation, but there are bigger issues with which the Government have not yet dealt, including the reform of public sector pensions, and the reform of tax relief in ways that are strongly hinted at in the Pensions Commission report and the Select Committee report.
	The direction of travel is right, but the hon. Member for Cannock Chase (Dr. Wright) said earlier, on pension compensation, that he feels that the Government have half-built a house. Similarly, on pensions reform, we feel that the house is not yet complete. Given the degree of consensus, we hope that we will not have to advocate knocking down any of the walls in future, but there is a long way to go before the house is completely built, so that we can deliver the pension system that the country really needs for the future.

Austin Mitchell: Of course, as a loyal Labour Member, I welcome the Bill, but the welcome is fairly cool because the Bill is not as generous as I would have liked it to be. In any case, I have to welcome it, because I have not been able to express the dissent that I wanted to express on subjects that have been mentioned by my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones)the earnings tie and the age of retirement. It is ludicrous that those two major issues, which are of overwhelming importance, are not even being discussed on Report. I hope that they can be covered far better in another Chamber, because they need to be discussed, and the situation needs to be changed.
	I welcome the Bill because it is a solution to problems, and particularly because it improves the position of women, although it is not before time. The situation has been monstrous, but it will be changed, thanks to the Bill. I also welcome the Bill because it provides a platform for the future, when I hope that we can eventually be more generous, but it is not a platform on which I want to stand in Grimsby and tell my constituents, However old you are, hang on until 2015, and you'll get a better deal. That is not the kind of result that I wanted from a Bill as all-encompassing and all-important as this one. It does nothing for current pensioners, and we could have tackled the two problems together.
	First, on the earnings tie, some 21 per cent. of pensioners are now below the poverty line; that is 2.2 million people. The earnings tie could and should have been restored by now, or much earlier. We will restore it eventually, but eventually is a long, long time away, and many of us will not actually reach it. Let us face it, our pensions are among the lowest in the world. They are lower than pensions in many of the countries that are new entrants to the European Community, including Slovenia, Latvia and Estonia. The Cheeky Girls will not be retiring to Wales; they will go back to Latvia, Estonia or wherever to get better pensions than they would get if they stayed in this country. It is monstrous that our pensions should be so low, compared to those of those new entrants. We need to help.
	Our poverty line is 60 per cent. of median earnings, and pensioners should not be required to live below that line. We can only ensure that they do not by restoring the earnings link earlier. I agree that pension credit goes a long way; it is a salutary innovation of the Government's that I have long welcomed. The pension credit, ne the minimum income guarantee, is a welcome development, but it is means-tested, and because the increase to the basic pension is not as closely allied to the increase in earnings as it should be, means-testing, which is implicit for pension credit, will increase enormously. The gap between the pension credit and the actual pension will be much wider as time passes. Means-testing channels a limited amount of money to those most in need, but it is not claimed by many people who need the money, so it is an inefficient way of increasing pensions. We should therefore restore the direct tie to earnings.
	My second point of dissent concerns the raising of the retirement age, which will be painful for many people. It is ludicrous to expect people in hard manual jobs whose physical strength is often broken by a life of hard manual labour to carry on working until they are 68. Fishermen, for instance, lead a tough life, and the pension arrangements in the industry are very bad. French fishermen retire on a full pension at 55. What am I to say to the former fishermen in Grimsby? Should I tell them to carry on fishing when they are over 65, over 60, or over 55? It is ludicrous to introduce such measures, as the system must be graduated. We must channel pension support to the poorest and to people whose jobs involve hard manual labour. After all, people in the poorest areas live 12 years less than people in the richest areas, and the pension system should be able to cope with that situation. I wish to brief, and I shall not wander over two previous debates, as the hon. Member for Eastbourne (Mr. Waterson) did. I welcome the Billit is a cool welcomebut I worry intensely that it does nothing for people now.

Julie Kirkbride: I am grateful to be called to speak, and I shall make a brief contribution.
	I largely welcome the provisions of the Bill, even though I am disappointed that the Minister and some of his Back Benchers could not support the cross-party amendment that was tabled earlierI pay tribute to the Labour Back Benchers who did support itas it would have greatly benefited my constituents who worked at United Engineering Forgings, which became bankrupt, and at Kalamazoo. They would have greatly appreciated the lifeboat scheme proposed by the Opposition, as they are seeking immediate benefit, because they will not have the security of pension payments for some time. I very much hope that when the Minister has conducted his review, he can reannounce the proposals that the Conservatives introduced today in his own words, and that finally the benefits of the Pension Protection Fund will be available to people who must currently use the financial assistance scheme.
	May I briefly put on record one aspect of the Pensions Bill that is lackingand I do not think that the Minister will find this surprising? Yesterday, the Minister graciously agreed to meet some of my constituents who took early retirement and are particularly affected by the provisions of the Pensions Act 2004 which immediately cut the pension benefits payable to people who took early retirement. I am not sure that the House anticipated that when it introduced the Bill those people would be uniquely affected by its provisions. For many people, benefits were cut by at least by at least 10 per cent. and in some cases by 70 per cent. of what they were expecting, which has a knock-on effect on their wives' and, indeed, widows' pensions if they pre-decease their spouse.
	A much wider issue is therefore involved. It clearly cannot be addressed today, as the Bill is about to complete its passage in the Commons, but fresh amendments could be tabled in the other place to try to improve the position of people who took early retirement. They are not asking for a great dealthey are just asking for an improvement to their present predicament. The Minister obviously has to cost that with regard to the existing PPF commitments, but we believe that there are ways of taking the issue forward. I implore him to take a further look at the matter, as he said that he would do so. I am grateful to you, Mr. Speaker, for giving me the chance to put that on the record in the Chamber.

Kelvin Hopkins: I entirely agree with everything that my hon. Friends the Member for Birmingham, Selly Oak (Lynne Jones) and for Great Grimsby (Mr. Mitchell) said, so I do not need to say it again, but I wish to make some other points.
	The direction of travel has changed as a result of Turner and pressure from the pensioners' movement and Members of this House. We are starting to move in the right direction, very slowly, with very small steps, but I would say to my hon. Friends on the Front Bench that many Labour Members will be pushing to go much further than they are suggesting. The pension is far too low, it is still means-tested, and the earnings link has not been restored and will not be for some time yet. I make no bones about the fact that I want a substantially higher pension that is not means-testedwe should use the taxation system to redistribute income insteadwith an earnings link restored when the pension reaches the level of 25 per cent., instead of 15 per cent., of earnings.
	On occupational pensions, if the Government do not secure the system and ensure that people trust in it, believe in it and continue to support it, in the end the only fall-back will be a thoroughgoing state system. That would be perfectly acceptable for a socialist like myself, but not so acceptable, I suspect, for my hon. Friend the Minister. I leave that thought with him.
	On affordability, I think that that is a nonsense word. If my children had said when they were young, Can we have more pocket money?, and I had said, I can't afford it, they would have said, That's nonsense, dadwe know you can afford it, and they would have been right. What I would have meant was, I choose not to give you any more pocket money, which is a very different matter. Compared with other countries in Europe, particularly those in Scandinavia, Germany and France, we have a lower gross tax take and a lower level of public spending on public services. I want to see much higher levels of both. The Scandinavian economies are very successful, and we could go much further in their direction. Affordability is a non-argument: what it means is, We choose not to give you higher pensions because we don't want to pay for them. That is unacceptable.
	I want much higher pensions for our pensioners that are comparable with pensions incomes in other developed countries, and I am perfectly happy to have a much more progressive system of taxation to pay for it. I understand from a recent written answer that there is a massive surplus of 73 billion in the national insurance fund. If the upper earnings limit on national insurance contributions was removed, that would equate to an extra 6.5 billion. There is plenty of money, but it happens to be in the wrong pockets. We should take the money from those who may have too much and give it to those who have too little, the majority of whom happen to be our pensioners. I want a redistributive taxation system and much higher pensions without means-testing.

Dai Davies: I will be very brief, as there is not much time left.
	As a former trustee of the British Steel pension scheme, I think it important that we pay tribute to the union trustees who work extremely hard on protecting schemes. We should consult trustees more on how we can help to protect schemes; they should be fully involved. Having worked within Allied Steel and Wire for the Community union, formerly the Iron and Steel Trades Confederation, I think that occupational pension schemes are a great asset, but they need to be boosted and looked after.
	In a borough such as mine, with an average wage of 14,000 a year and house prices averaging 100,000, how we encourage people to save through pensions will be very problematic. We need to start educating people now: we must talk to young people about how important pensions are and how they can be a protection for the future. I wish us luck in that battle ahead, and when the Bill comes back I hope that some of the time scales as regards the state pension age and changes to the state pension can be improved. I am sure that that campaign will continue.
	 Question put and agreed to.
	 Bill accordingly read the Third time, and passed.

DRAFT CLIMATE CHANGE BILL (JOINT COMMITTEE)

Resolved,
	That this House concurs with the Lords Message of 27th March, that it is expedient that a Joint Committee of Lords and Commons be appointed to consider and report on the draft Climate Change Bill presented to both Houses on 13th March 2007 (Cm 7040), and that the Committee should report on the draft Bill by 13th July 2007.
	 Ordered,
	That a Select Committee of twelve Members be appointed to join with the Committee appointed by the Lords to consider the draft Climate Change Bill.
	That the Committee shall have power
	(i) to send for persons, papers and records;
	(ii) to sit notwithstanding any adjournment of the House;
	(iii) to report from time to time;
	(iv) to appoint specialist advisers; and
	(v) to adjourn from place to place within the United Kingdom.
	That Ms Celia Barlow, Mr David Chaytor, Helen Goodman, Nia Griffith, David Howarth, Mr Nick Hurd, Mr David Kidney, Mark Lazarowicz, Mr Graham Stuart, Dr Desmond Turner, Dr Alan Whitehead and Mr Tim Yeo be members of the Committee. [Claire Ward.]

DELEGATED LEGISLATION

Ordered,
	That the Social Security Benefits Up-rating Regulations 2007 (S.I., 2007, No. 775), dated 8th March, be referred to a Delegated Legislation Committee. [Claire Ward.]

GATWICK AIRPORT (GROUND HANDLING)

Motion made, and Question proposed, That this House do now adjourn. [Claire Ward.]

Laura Moffatt: I am most grateful for the opportunity to raise an important matter on the Adjournment this evening. The millions of the travelling public who use Gatwick airport and the thousands of people who work there also believe that it is important.
	My constituencyCrawley in West Sussexhas grown up with Gatwick airport since the 1950s. The airport is wholly within the Crawley constituency and, even in the worst of the Tory years, when recession, high interest rates and unemployment wreaked such havoc in so many communities across the UK, it sustained Crawley and we have always been grateful to it.
	The year on year success of Gatwick is a key reason Crawley is the most successful of the new townsbut I would say that, wouldn't I? By sustaining high employment, the quality of all our lives is enhanced. I know from my frequent dealings with local business people how much they appreciate the quality of service that they get from Gatwick and its impact on the local business community. There can be no doubt that Gatwick is the premier business in the Gatwick diamond area, and a major draw for many other businesses locating there.
	It consistently wins the airport of the year award and we are justly proud of that. Gatwick's status as a transport hub is crucial, which is why we so warmly welcome the Department for Transport's recent decision to retain Gatwick Express, through a reasonable compromise about which we are delighted locally.
	I recently met around 100 local business people from my constituency when they came to the House of Commons for a business summit that I arranged the day after the Budget. It is a mark of the importance that the Treasury places on the business community in the Gatwick diamond area that my hon. Friend the Economic Secretary made himself available for the event.
	We learned that the Gatwick diamond business community is vibrant, enthusiastic and extensive, with a GDP that is estimated at 38 billion. It ranks 56th out of 200 regions measured across Europe. Naturally, the business community is keen to promote the Gatwick diamond area throughout Europe and internationally. A central part of that promotion must be the airport.
	People in and around Crawley are proud of their airport. The many thousands of people who work there take a genuine pride in the services that they provide and understand clearly the benefits that Gatwick brings. They jealously guard their safety and security reputation, and that is the reason for the debate today. All sorts of people contribute to that good reputation. They include catering staff, security staff, baggage handlers, customs officers, air crew, ground staff, engineers, cleaning staff, immigration staff and medical and nursing staff. I know that I have missed out many people. I simply wanted to mention the many teams that provide such an excellent service.
	We all know about the extra pressures that now face airports through the increased security that they have to provide. Staff at Gatwick have risen to the challenges and the heightened security, which has added to the pressures of their work. We congratulate them on their work. BAA is having to recruit many more staff to rise to that challenge, and I look forward to seeing them in place soon.
	I have set the scene, and now I want to look in more detail at the issues that have arisen with ground handling services at Gatwick. Among other responsibilities, they cover the arrangements for handling the enormous quantity of luggage that inevitably accompanies the 35 million people who travel through the airport each year. For historical reasons, the Civil Aviation Authority has always set a limit on the number of companies involved in ground handling at Gatwick. That has not been a popular decision with everyone. Some felt that it was anti-competitive, especially those airlines operating within tight margins, for whom all cost savings are vital. With liberalised competition, however, things have changed substantially.
	Recently, the CAA decided to review the four-operator limit, and held a consultation into the number of ground handling operators working at Gatwick. Of course, holding that consultation was the right way to proceed, but the online consultation was not well advertised, even though it needed to seek the views of people dealing with the issues day in and day out, as well as those of the airline representatives. There was general concern that the consultation process needed to include staff working in ground handling. Representatives of the Transport and General Workers Union and I pressed for the voice for all those staff to be heard to ensure that their expertise and experience was central to the debate.
	Most of us do not fully understand the complexities and pressures involved in turning an aircraft round in as little as 25 minutes. There could be as many as 10 different service providers working on one aircraft, and the pressures on staff are enormous. Ensuring their health and safety, along with the safety of the aircraft, must be a priority. That is why I was delighted that the TGWU campaign and the petition to the CAA to extend the consultation period was successful. That allowed those voices to be heard, and I thank the CAA for responding positively. I also pay tribute to those in the T and G, particularly Ian McCullogh and Colin Terry, who worked so hard locally to ensure that these issues were raised. The trade unions have made an important contribution to ensuring that safety is at the heart of the Gatwick operation, with the publication of the charter, particularly from the T and G, which outlines minimum standards for the ground handling services for aircraft. The GMB union conducted a safety audit a couple of years ago, which also made a great contribution.
	The concerns relate to the impact of increased competition on the health and safety of the workers and the aircraft. There has been unease, following the consultation, at the speed with which the decision was taken to allow a further ground handling operation at Gatwick. That ground handler was allowed on to the airport just one week after the decision was made. It is not surprising that that resulted in a widespread feeling of scepticism among the existing ground staff about the outcome of the consultation process, as they felt that they had made a good case for ensuring that there was not too much competition, and therefore pressure on the work force.
	All staff and employers have a responsibility for health and safety under the Health and Safety at Work, etc. Act 1974. We all accept that. It must therefore be right that the CAA, the contractors and all other employers take into account health and safety issues when making decisions and agreeing any contracts. Many of my constituents involved in manual handling at Gatwick have raised concerns about health and safety since the work pressures on them increased. They say that the drive to reduce costswhich comes from all areas of the airport operationhas already had an impact on staffing levels, leading to a significant increase in manual handling per worker. We should also recognise that there have been significant improvements in the mechanical equipment used to move the vast quantities of cargo and luggage, but people still have to lift very heavy bags.
	The facts clearly show that staffing levels have fallen at the same time as aircraft movements and passenger numbers have risen. The airport staff have my sympathy. As a nurse for 25 years, I too was in a profession whose members were susceptible to manual handling injury. Such injuries can be very disabling, and I understand how important it is to ensure that everything possible can be done to minimise the possibility of their occurrence.
	Lines of responsibility in health and safety in the national health service are very clear, but I am not entirely sure that that applies to airport workers. It would be helpful if the Minister gave us assurances today on some of the measures that we believe would help us to retain Gatwick's jealously guarded good reputation. Perhaps she will also tell us whether there have been any impact assessments of the incidence of manual handling-related injuries since the introduction of more ground handling companies, and what other measures exist to ensure that standards are maintained as a further operator comes on board. I am not opposed to competitioncompetition is healthybut it is reasonable and important to expect health and safety issues always to come first, especially at an international airport. Health and safety and security go hand in hand.
	Two particular worries concern weight limits for individual items of luggage. There have been calls for implementation of the 23 kg limit, but it has not yet been enforced. It is not uncommon for cargo weights in excess of 100 kg to be manually handled by workers in airport holds. The provision of adequate chutes and lifts in areas where staff regularly have to handle items such as wheelchairs is essential, and is crucial to the well-being of airport staff.
	Clarity on responsibilities for health and safety issues is vital. I thank the Minister for her helpful answers to my recent parliamentary questions, but they indicate that responsibilities currently fall between the Civil Aviation Authority and the Health and Safety Executive. I should like more information on the particular responsibilities of those bodies.
	When I recently had talks with the new airport director, Andy Flower, I raised many of these matters with him. I look forward to receiving the further information that he has promised me, and to further discussions. I want to know how BAA can help to ensure that standards are maintained at Gatwick and that those standards embrace all staff, not just BAA staff. I am told that there has been quite a campaign of letter-writing to the airport director, and I know that many of those people look forward to replies from him on these important issues.
	I am immensely proud of Gatwick airport and its entire work force. I want to see the airport go from strength to strength as it adapts to meet the challenges posed by a growth in the number of passengers to 40 million a year. Airport workers can be justly proud of their record on health and safety and security, and we want to ensure that it continues. That is why I have raised these issues today, and why I will continue to press to ensure that standards are maintained at Gatwick so that it remains the airport of choice for many people. The thousands who keep Gatwick airport functioning deserve the support of the House. If they are to keep us travelling, they need to know that they have our support, and that we care about the work that they do.

Gillian Merron: I congratulate my hon. Friend the Member for Crawley (Laura Moffatt) on securing the debate. She is a tremendous advocate for the people who work at Gatwick airport, and is highly respected both in the House and outside for being so.
	I entirely agree with my hon. Friend that Gatwick airport is a great success story, not only for the local areaimportant though that isbut for the United Kingdom as a whole. It supports, directly and indirectly, thousands of jobs and the many business opportunities that underpin the success of the Gatwick diamond and the surrounding areas. I agree that the Gatwick Express announcement was good news for passengers and the local community, and I thank her for her support in the campaign that led to us getting that good news. We are adding more seats and trains on one of the country's busiest rail routes. The need to increase capacity is a great challenge facing the railway industry, and it is a priority for my Department.
	As with all airports, the success of Gatwick depends on the contributions of the many and varied people who work there, including those, such as ground handling staff, whose contribution is often unglamorous and hidden from the public gaze, but without whom the whole operation would quickly grind to a halt. I extend my thanks and congratulations to those who work on the groundliterallyat airports, because without them the United Kingdom aviation industry could not continue to offer a first-class service to the travelling public during the many difficult times, such as those that we have gone through lately. I thank them for their co-operation and, in many cases, for their great flexibility.
	I understand the concern of staff at Gatwick over the removal of the existing limit on the number of companies permitted to provide ground handling services. It might be helpful if I set out the regulatory position that gives rise to the situation. It is not correct that there has always been such a limit. Before 1998 there was no limit at all. In that year the Civil Aviation Authority, on an application from Gatwick Airport Ltd, made a determination under the ground handling regulations, which had been implemented in the UK the previous year, to limit to four the number of suppliers of airside ground handling services at Gatwick airport. The CAA subsequently modified the determination in 1999, again on application from the airport, so that the number of suppliers of airside bussing services would be limited to two, rather than four. Both decisions rested primarily on arguments relating to the space and capacity available at the airport at that time.
	It is important to remember that in the 10 years since the ground handling regulations came into force Gatwick has been the only UK airport with a legal limit on the number of handlers allowed to operate. Gatwick Airport Ltd applied to the CAA in April 2006 to have both of the existing limits removed. On 30 May, the CAA published a proposal in its official record and on its website stating that in the absence of clear arguments to the contrary it was minded to accept the judgment of Gatwick Airport Ltd, as the responsible operator of Gatwick airport, that the existing limitations on the number of airside handlers should be removed.
	The CAA asked for representations on this proposal to be made by the end of June. I appreciate my hon. Friend's comments about the effectiveness of the consultation process. The CAA extended the period for comments, which I welcome, following representations from the Transport and General Workers Union, to ensure that the union could make a written submission, which it did in October 2006. The TGWU raised a number of concerns about the possible effects of increased competition in the provision of ground handling services at Gatwick, particularly in respect of security, health and safety, and the capacity of the terminal facilities. The CAA considered the representations carefully and seriously, but found no compelling grounds for it to reject the judgment of Gatwick Airport Ltd. Consequently, it decided to revoke the existing limit on the number of companies permitted to provide ground handling services at Gatwick. The CAA's full decision is set out in its official record, published on 20 February 2007.
	In view of the well-established mechanisms of safety oversight of airport operations by the CAA's safety regulation group and by the Health and Safety Executive, the CAA found no reason to believe that removing the limit would itself have a detrimental effect on health and safety levels. I expect the parties most directly concernedsuch as the airport, the airlines and the handling companiesto ensure that any changes to the ground handling arrangements at Gatwick are implemented in a way that does not compromise the safety of staff, which is of paramount importance.
	My hon. Friend asks specifically about the respective roles of the CAA and the Health and Safety Executive. The CAA is responsible for ensuring that risks to civil aviation safety are properly controlled. To this end it seeks to ensure that Gatwick airport is safe for use by aircraft and that operators of aircraft have suitable safety arrangements in place both in the air and on the ground.
	The role of the HSE is to ensure that risks to people's health and safety from work activities are properly controlled. There is a memorandum of understanding between the CAA and the HSE, the aim of which is to ensure co-ordination of policy issues, enforcement activity and investigation in respect of aircraft and the systems in which they operate. The memorandum is available for inspection in the safety regulation group section of the CAA website.
	My hon. Friend also asks what measures are in place to ensure that standards are maintained as a further operator comes on board and whether any impact assessment of manual handling-related injury has been made since 2002. Prior to the removal of the limits, as part of the re-licensing process, Gatwick Airport Ltd undertook an audit involving existing handling companies and the potential new entrant that looked at health, safety, environmental responsibility, security and service standards. I understand that the potential new entrant received a favourable rating. I also understand that the airport is implementing an enhanced safety performance regime with the expectation of improved safety performance across the board.
	My hon. Friend raised two specific health and safety concerns. On weight limits, I understand that the Health and Safety Executive has been successful in working with aircraft operators, ground handling organisations and airports to limit the maximum weight for hold baggage to 32 kg, and that talks are under way to reduce this to 23 kg. This, however, applies only to UK aircraft operators. Otherwise, ground handling operations come within the sphere of the Manual Handling Operations Regulations 1992. The regulations do not set specific weight limits for manual handling, but instead recommend that a specific ergonomic assessment should be made to take account of the specific circumstances of each activity to ensure that the health and safety of the work force is assured. I would expect the parties involved to take full account of those recommendations. In the light of my hon. Friend's representations, I have asked officials to look at ways in which that matter can be raised at a European level and I will be happy to get back to her on that point.
	The provision of chutes and lifts in areas where staff regularly have to handle manual items such as wheelchairs is essentially a matter for the airport's management. As part of the development of the airport's capital expenditure programme, I would expect that to be the subject of consultation between the airport and its customer airlines, which are likely to have in mind the implications for their ground handling suppliers of investingor of failing to investin facilities that support ground handling activities.
	I am aware that concern has been expressed about the space to accommodate extra handlers. The CAA accepted Gatwick's contention that congestion was primarily a function of peak passenger demand at the airport, rather than being related to the number of ground handlers operating. In its 1998 decision, the CAA had noted that it would be possible to review the limit on the number of handlers should circumstances change significantly from those then prevailing at Gatwick. The CAA said that it now expected Gatwick airport to work with all handlers to ensure that adequate space was sought and used appropriately.
	The CAA notified all interested parties of its decision to remove the limit on the number of ground handling service providers at Gatwick on 14 February 2007. Gatwick airport was therefore free to appoint a fifth handler at any time after this date.
	I understand what my hon. Friend the Member for Crawley said about the speed with which a fifth operator was announced, and her observation that that generated scepticism about the consultation process among existing ground handling staff. However, I can assure both her and them that the airport's preparations had no effect on the CAA's decision.
	I understand that the airport had to act rapidly to complete the appointment, as a number of the existing ground handling contracts were due to expire at the end of March. An orderly handover of business was needed, in the interests of the airport and of its customers and staff.
	I thank my hon. Friend the Member for Crawley for speaking up on behalf of people who are an integral part of the Gatwick airport team. I assure both her and her constituents that I shall continue to take a close interest in the matters that have been raised in the House tonight.
	 Question put and agreed to.
	 Adjourned accordingly at twenty - five minutes past Seven o'clock.